13. September 2022 Meghan Sapp

Vertex conversion of Alabama refinery to renewable diesel postponed to Q1 2023

In Texas, Vertex is currently working on completing a $90-$100 million capital project designed to modify the company’s Mobile, Alabama Refinery existing hydrocracking unit to produce renewable diesel fuel on a standalone basis. Upon completion of the conversion project, the refinery is expected to commence production of approximately 8,000 – 10,000 barrels per day (bpd) of renewable diesel, with production volumes anticipated to subsequently ramp up to approximately 14,000 bpd. This project seeks to capitalize on the rapidly growing demand for advanced sustainable fuels, while further expanding upon Vertex’s commitment to supply lower carbon fuels solutions.

After a thorough review of project execution risk by the Company, mechanical completion of the Mobile Refinery’s renewable diesel conversion project has been proactively extended from its initial target of year-end 2022, to the first quarter of 2023. These risk considerations are the result of recent COVID-19 induced product delays and global supply chain shortages in several previously unimpacted markets, including common pipes, valves and fittings, and certain base bulk materials. Limited visibility into a solution for these challenges, combined with the notable financial benefits associated with reduced downtime and extending current operations, have allowed the Company to respond by extending the project timeline to ensure all necessary parts and materials are ready and on-site prior to shutting the hydrocracker unit down. 

Management now expects mechanical completion to occur in the first quarter of 2023, with production anticipated to begin in the second quarter of 2023, an extension of the previously communicated timeline of approximately one quarter.