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Continental Refining to repurpose idled Kentucky refinery to a biofuel facility

Highlights

Biodiesel and fuel terminal online Q4 2021

Soybean crushing facility online Q1 2022

Biodiesel output expected at 5 million gal/year

Continental Refining is moving forward with plans to install at its idled Kentucky oil refinery a soybean crushing and processing facility to make biofuels.

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"CRC has completed its evaluation of the project feasibility and is currently making progress with detailed design, equipment procurement, permitting, and construction of a soybean processing facility, biodiesel plant, and a fuels terminal," the company said in an April 28 statement.

The 5,500 b/d hydrocarbon refinery was shut down in 2018 and in 2020 the company decided to make and blend fuels using local soybean oil, which it will crush itself, as a feedstock.

"The Southcentral and Southeastern regions of Kentucky have industries and institutions that rely on diesel fuels, and because Kentucky is a leader in the nation for soybean production, the region also has the raw materials and technology to make biodiesel at a scale that reflects the local and regional demand," said Demetrios Haseotes, CEO of Hemisphere Limited, a business management consultant company with holdings in real estate, shipping and refining including Continental Refining.

"We have consulted with local, progressive soybean producers, taken their input and they are very encouraged about the project. We look forward to investing in the future of energy production that actually creates beneficial biproducts we can in turn sell, like high-protein fiber meal for poultry and livestock." Haseotes added.

With the hulls and meal going to animal feed following crushing, the soybean oil will be processed into B100 biodiesel and blended with purchased ULSD to make blended ULSD with between B5 and B99 biodiesel content, which is also seeing an increase in value.

Continental continues to seek to procure soybeans from local farmers, according to their website.

Kentucky's soybean production was forecast at 101 million bushels in 2020, according to the USDA. But locking in feedstock supply agreements are becoming more crucial as the number of renewable and biofuel plants planned continue to grow increasing demand for soybean oil.

For the week ended April 25, soybean oil averaged $4.6235/lb, up from $4.4575/lb the week earlier, according to S&P Global Platts assessments, as demand grows.

However, the price of biodiesel is also rising. Biodiesel B100 delivered in Houston rose to reach $ 4.78/gal on April 28, after jumping 10 cents/gal on April 27 following oral arguments in the Supreme Court on April 27 pitting renewable fuel producers against refiners in regards the criteria for small refinery exemptions sought by many refineries under 75,000 b/d. The decision, expected sometime in July, could further increase the price if SCOTUS rules against the refineries, forcing them to buy more renewable credits.

Continental has already begun the permitting process with the Kentucky Department of Environment Protection. The company said it expects the biodiesel plant and fuels terminal to start operations in the fourth quarter of 2021.

"The soybean processing equipment is deep into its design phase with equipment procurement and installation soon to follow and anticipated startup in the [first quarter] of 2022," the statement said.

According to the company, the soybean crushing facility will be able to process 4 million bushels per year of soybeans. Biodiesel production is expected to produce up to five million gallons per year while the product terminal will be able to distribute over 130 million gallons of product annually.