October 31, 2020

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Phillips 66 to convert Bay Area refinery into world’s largest renewable fuels plant

Phillips 66 to convert Bay Area refinery into world's largest renewable fuels plant
Photo courtesy of Phillips 66

Phillips 66 (NYSE: PSX), a diversified energy manufacturing and logistics company based in Houston, Texas, U.S.A., announced plans to convert its San Francisco Refinery in Rodeo, California, U.S.A., to produce renewable fuels. The plant would no longer produce fuels from crude oil, but instead would make fuels from used cooking oil, fats, greases and soybean oils.

The San Francisco Refinery has two facilities with a total refining capacity of 140,000 barrels per day (bpd), linked by a 200-mile pipeline: Santa Maria, in Arroyo Grande, which was built in 1955, and the Rodeo facility, which was built in 1896, in the Bay Area. The refinery currently processes a mixture of heavy, high-sulfur and light sweet crude oils. It receives California crude oil by pipeline and both domestic and foreign crude oils by tanker. Semi-refined products from Santa Maria are sent by pipeline to Rodeo for upgrading into finished petroleum products. A large portion of the refinery’s production is transportation fuel such as gasoline and diesel fuel. Both these facilities will be shut down in 2023, and associated crude oil pipelines will be taken out of service in phases.

The Phillips 66 Rodeo Renewed project would produce 680 million gallons annually of renewable diesel, renewable gasoline, and sustainable jet fuel. Combined with the production of renewable fuels from an existing project in development, the plant would produce greater than 800 million gallons a year of renewable fuels, making it the world’s largest facility of its kind.

The project scope includes the construction of pre-treatment units and the repurposing of existing hydrocracking units to enable production of renewable fuels. The plant will utilize its flexible logistics infrastructure to bring in cooking oil, fats, greases and soybean oils from global sources and supply renewable fuels to the California market, which has a Low Carbon Fuels Standard (LCFS). The LCFS requires oil refineries and distributors to ensure that the mix of fuel they sell in the California market meets the established declining targets for greenhouse gas (GHG) emissions measured in CO2-equivalent grams per unit of fuel energy sold for transport purposes.

Phillips 66 says the Rodeo Renewed Project is expected to deliver strong returns through the sale of high value products while lowering the plant’s operating costs, although no details were provided.

“Phillips 66 is taking a significant step with Rodeo Renewed to support demand for renewable fuels and help California meet its low carbon objectives,” said Greg Garland, chairman and CEO of Phillips 66. “We believe the world will require a mix of fuels to meet the growing need for affordable energy, and the renewable fuels from Rodeo Renewed will be an important part of that mix. This project is a great example of how Phillips 66 is making investments in the energy transition that will create long-term value for our shareholders.”

If approved by Contra Costa County officials and the Bay Area Air Quality Management District, renewable fuels production is expected to begin in early 2024. Once reconfigured, the plant will no longer transport or process crude oil.

The plant is expected to employ more than 400 jobs and up to 500 construction jobs, using local union labor, including the Contra Costa County Building & Construction Trades. Currently, the refinery has 650 employees, including on-site contractors.

To learn more about the project, visit www.RodeoRenewed.com.

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