Valero, Darling to move forward with Port Arthur Diamond Green Diesel project

New York — Valero Energy and Darling Ingredients Jan. 28 announced in a statement that their joint-venture, Diamond Green Diesel, received approval by both boards to move ahead with construction of a renewable diesel facility at Port Arthur, Texas.

"The project is moving forward immediately and we fully plan to utilize the first mover advantage DGD has in North America as we believe Darling's vertical integration coupled with Valero's refining expertise are key to providing low carbon feedstocks to the DGD renewable diesel platform," said Darling CEO Randall Stuewe in the statement.

The new facility's capacity will be able to produce 470 million gallons of renewable diesel annually and is expected to come online in the second half of 2023. It will be situated near Valero's 335,000 b/d Port Arthur refinery.

Currently, DGD operates the St. Charles Renewable Diesel Plant – DGD 1 – adjacent to Valero's 215,000 b/d Norco, Louisiana, refinery where capacity has increased from 275 million gallons per year to 290 million gallons per year "as a result of the continuous process improvement and optimization..", said Joe Gorder, Valero's CEO on the Jan. 28 fourth quarter results call.

With the DGD 2 expansion currently underway, the plant's capacity is being expanded by 400 million gallons per year and will reach 690 million gallons per year by the end of 2021.

When DGD 3 – the Port Arthur plant – comes online DGD expects to be able to produce 1.2 billion gallons of renewable diesel and 50 million gallons of renewable naphtha with the addition of the Port Arthur facility.

Valero reported renewable diesel sales of 618,000 gallons per day in the fourth quarter, down 226,000 million gallons per day from the year earlier due to planned work. For 2021, Valero expects renewable diesel sales volumes to average 790,000 million gallons per day.

Renewable diesel prices are stronger so far in the first quarter of 2021 compared with the fourth quarter of 2020, according to Platts assessments. On the US West Coast, Platts assessed renewable diesel including California's Low Carbon Fuel Standard (LCFS) credits at 420.769 cents/gal so far in the first quarter compared with the 363.057 cents/gal in the fourth quarter of 2020.