March 2, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Bunge North America is partnering with Chevron Corp, a subsidiary of Chevron U.S.A., in a joint venture  for the production of feedstocks used in the production of renewable diesel and sustainable aviation fuel.

Definitive transaction agreements have been signed that outline the parameters of the endeavor which will leverage Bunge’s expertise in oilseed processing and farmer relations, and Chevron’s experience in fuel manufacturing and marketing.

The two parties have agreed that Bunge’s soybean processing plants in Destrehan, Louisiana, and Cairo, Illinois will be contributed to the venture, while Chevron’s contribution will be $600 million in cash to support the business.

Strategic plans include the doubling of the combined capacity of these two Bunge facilities from 7,000 tons per day to approximately 14,000 tons per day, by the end of 2024. Also agreed upon is the possible exploration of opportunities in other renewable feedstocks, as well as in feedstock pretreatment.

Partnering with Chevron, a global leader in energy, is a significant step forward in building the capability to make changes at scale to help reduce carbon in our own and our customers’ value chains,” said Greg Heckman, CEO, Bunge. “I am confident that our shared networks, global footprint and expertise is the right partnership to build a successful long-term and low-cost enterprise that will help meet the demand for next generation, renewable fuels.”

The Crush For Biofuels

There has been massive movement across the Canadian provinces and the U.S. Plains as oilseed crushing facility deals have been booming in expectations of meeting the needs of biofuel demands.

In little more than a month’s time during the spring of 2021, three major companies announced plans to build massive canola crushing plants in the province through projects that carry a combined value exceeding $1 billion. 

More recently, in January of this year, Saskatchewan-based oil company Federated Co-operatives Limited (FCL) made multiple announcements, including the signing of a memorandum of understanding to form a joint venture with AGT Foods & Ingredients, a leader in plant-based proteins and processing of pulses, grains, staple foods, and ingredients, to construct another $360 million canola crushing plant. 

This facility builds upon another recent announcement by FLC that it intends to build a renewable diesel plant in the Regina area, and will provide approximately 50 percent of the feedstock required for production of 15,000 barrels-per-day.

In May of last year Archer Daniels Midland (ADM) announced it was investing $350 million to build the first dedicated soybean crushing plant and refinery in North Dakota.

Strategically located in Spiritwood, North Dakota – a major soybean producing region – this crushing and refining complex will include state-of-the-art automation technology supporting a processing capacity of 15,000 bushels of soybeans per day.

And continuing this trend, two different companies made their own announcements within a week’s time – Bowdish Company announced it intends to invest $375 million to build a state-of-the-art soybean crushing plant near Norfolk, Nebraska. Production at the site will result in 847,000 tons of soybean meal per year destined for livestock feed markets, and 450 million pounds of crude soybean oil and 77,000 tons of pelleted soybean hulls per year to be used in livestock feed rations. The soybean oil, however, will also have the potential to be used for the rapidly expanding renewable diesel industry.

Within the same week, Ag Processing Inc. (AGP) made its own announcement outlining its plans to build an advanced soybean processing plant near David City, Nebraska, with an annual capacity to crush more than 50 million bushels of soybeans. Owned by local and regional farmer and producer cooperatives, and with a headquarters in Omaha, Nebraska, Ag Processing is a leading agribusiness primarily as a soybean processor/refiner, producing and marketing soybean meal, refined soybean oil, and biodiesel.

Back to Bunge…

Joining the scrum is Bunge, which according to the agreement with Chevron, will manage the crushing facilities, and Chevron will have purchase rights to the oil to use as a renewable feedstock for the manufacture of low-carbon-intensity transportation fuels.

“Chevron expects to create the capacity to produce 100,000 barrels per day of renewable diesel and sustainable aviation fuel by 2030,” said Mark Nelson, executive vice president of downstream & chemicals, Chevron. “By taking this first step in securing a predictable supply of renewable feedstocks in partnership with Bunge, we are positioning ourselves to meet that goal and supply our transportation customers with lower lifecycle carbon intensity fuels.”

*The content put forth by GAI News and its parent company HighQuest Partners is intended to be used and must be used for informational purposes only. All information or other material herein is not to be construed as legal, tax, investment, financial, or other advice. GAI and HighQuest Partners are not a fiduciary in any manner, and the reader assumes the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on this site.

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.