North American refiners advance mix of conventional, renewables projects (2024)

Global refiners continued executing investments in 2023 primarily on works aimed at adapting their conventional operations to help ensure long-term competitiveness as the industry prepares for a low-carbon future in line with the global energy transition.

In addition to expanding capacity for renewable fuels production via conversion or modification of existing manufacturing assets, legacy and new operators unveiled plans to build grassroots renewable plants, many of which will be dedicated to producing sustainable aviation fuel (SAF). While some refiners proceeded with works to rationalize conventional crude processing capacities via permanent closures or transformation of sites to low-carbon hubs, others carried out works to lower plant emissions amid efforts to optimize existing process capacities.

This year’s worldwide refining report focuses on major projects undertaken in 2023 by North American operators. Alongside developments intended to increase capacity for renewable fuels production and decarbonize current operations as refiners diversify their portfolios to meet commitments for achieving net-zero carbon emissions by 2050 or sooner, projects included increases to conventional capacity, as well as startup of a long-planned grassroots refinery.

Proposed US renewables projects

Industry’s increased efforts to meet rising demand for low-carbon transportation fuels in a manner aligning with long-range targets to achieve net-zero greenhouse gas (GHG) emissions by 2050 continued to spur US operators’ investment in projects involving both renewable fuels production and carbon capture and sequestration (CCS).

While other projects were announced for Oklahoma, South Dakota, and North Dakota in 2023, Louisiana—the only US Gulf Coast state with a climate action plan to reduce GHG emissions across the entire state economy—has attracted the bulk of combined US renewable fuels production-CCS projects currently under development.

Louisiana

In late 2022, Grön Fuels LLC—a subsidiary of Houston-based Fidelis New Energy LLC —revealed it would continue to develop its proposed $9.2-billion carbon negative renewable fuel complex at the Port of Greater Baton Rouge, on the west bank of the Mississippi River, near Port Allen, La.

First announced in late 2020 and approved for a minor source air permit by the Louisiana Department of Environmental Quality (LDEQ) in April 2021, Phase 1 of Grön Fuels GigaSystem involves construction of a grassroots plant equipped to process traditional renewable feedstocks (e.g., animal fats, soybean and canola oils, distillers corn oil, tallow, used cooking oil) and emerging feedstocks (e.g., algae oil and biocrude, among others) into 65,000 b/d of carbon-negative SAF and low-carbon renewable diesel for distribution to US and Canadian markets as well as export abroad. To achieve production of carbon-negative fuel production, the complex will employ CCS with carbon-negative power (CNP), including installation of a carbon-negative bioenergy with CCS (BECCS) plant to be operated by Fidelis subsidiary Capio Sequestration LLC.

The BECCS plant will capture CO2 produced from biogenic sources that recently captured atmospheric CO2 through photosynthesis for reuse in production of bio-based fuels and products. Grön Fuels GigaSystem’s combined use of CCS and BECCS, therefore, will have the effect of reversing climate change rather than merely slowing it, as BECCS reduces current CO2 levels in the atmosphere by removing the compound.

In addition to a renewable natural gas plant equipped to produce naphtha from by-products of the on-site renewables feedstock pretreating unit, the proposed complex will use its renewable co-products to produce more than 1,000 Mw of bio-hydrogen, or green hydrogen, to power hydrotreating processes at the site. To fully optimize the site’s efficiency and circularity, the complex also will reuse steam generated by waste-heat capture for emissions-free power generation, according to the operator.

Slated for phased construction over a period of about 10 years, Grön Fuels GigaSystem, if fully completed, will reach a renewable fuels production capacity of 1 billion gal/year. At a capital cost of more than $1.25 billion, the first 65,000-b/d phase of the complex remains on schedule to begin commercial production in 2025. Koch Engineered Solutions (KES) affiliate Optimized Process Designs LLC (OPD) is providing engineering, procurement, and construction (EPC) of Grön Fuels GigaSystem’s primary renewable fuels processing plant and associated supporting infrastructure.

In September 2023, LDEQ issued a key permit to Strategic Biofuels LLC allowing the operator to proceed with development of subsidiary Louisiana Green Fuels LLC’s (LGF) proposed grassroots renewable fuels project to be built on a 171-acre tract of land at the port of Columbia, in Caldwell Parish, La., about 25 miles south of Monroe. LDEQ’s approval of LGF’s air permit clears a major regulatory hurdle for the integrated project that, once operable, will include:

A biorefinery capable of producing nearly 32 million gal/year of renewable fuel with a carbon intensity of -294 from a feedstock of timber byproducts supplied by responsibly managed, sustainable plantation forests within Louisiana.
A CCS complex that will be sited on and around the biorefinery.
An adjacent BECCS power plant able to generate more than 85 Mw of electric power.

State approval of the air permit follows Strategic Biofuels’ June contract award to SLB for provision of site derisking and front-end engineering and design (FEED) services—as well as future injection operations and long-term CO₂ monitoring services—for the project’s CCS complex.

LGF’s integrated biorefinery-CCS-BECCS project—which will be classified as a synthetic minor source (SMS) of air contaminants and subject to all applicable state and federal regulations, including the US Environmental Protection Agency’s (EPA) national ambient air quality standard (NAAQS)—will have an estimated combined offsetting of up to 1.36 million tonnes/year (tpy) of CO₂ emissions.

Based on its most recent timeline, Strategic Biofuels said it plans to reach mechanical completion of the LGF and BECCS plants in 2027.

In November 2023, DG Fuels LLC let a contract to Emerson Electric Co. to deliver comprehensive automation and project engineering services for the operator’s planned SAF complex to be built along the west bank of the Mississippi River in St. James Parish, La. Emerson will provide DG Fuels with a suite of advanced sensing, control, systems, equipment monitoring, and production optimization technologies.

DG Fuels’ proposed $4.2-billion Louisiana investment project would involve construction of a very low CO₂ lifecycle-emissions complex equipped to produce up to 180 million gal/year of SAF from a feedstock of agricultural and timber waste using the operator’s proprietary high-carbon conversion technology.

Other states

In August 2023, Gevo Inc. confirmed it’s proceeding with value engineering, detailed engineering, and capital-cost updates for its proposed $850-million Net-Zero 1 (NZ1) project that aims to produce produce about 65 million gal/year of total renewable fuels, including 60 million gal/year of SAF using the operator’s proprietary technology, on a 245-acre site near Lake Preston, SD.

In late July, Gevo entered a master services agreement (MSA) with McDermott International Ltd. under which the service provider will deliver engineering, execution planning, and pricing for the EPC phase of the NZ1 project, which could convert to a final EPC contract award following FID on the project.

First announced in January 2021 and still pending FID, the NZ1 project—designed to include CCS and on-site renewable electricity generation via a combined heat and power system—will use a feedstock of renewable materials to produce SAF as well as renewable gasoline and diesel that, when burned, will have potential to achieve net-zero GHG emissions across the entire lifecycle.

The US Department of Energy (DOE) in July 2023 awarded a $2.5-million grant to the University of North Dakota’s (UND) Energy & Environment Research Center (EERC) to support works advancing implementation of a possible large-scale carbon capture, utilization, and storage (CCUS) project at Marathon Petroleum Corp.'s (MPC) renewable fuels production plant in Dickinson, ND (Fig. 1).

The grant for MPC’s proposed Dickinson CCUS development—one of 16 projects across 14 states recently awarded DOE funding under its Regional Carbon Sequestration Partnerships (RCSP) program—comes as part of the agency’s focus on accelerating large-scale deployment of carbon management technologies to reduce emissions from hard-to-decarbonize industrial installations and power plants, a crucial element in meeting climate goals.

The grant award follows MPC’s confirmation in its latest annual report to investors that, by yearend 2022, the company had completed unidentified works that have enabled the Dickinson renewables plant to run more advantaged feedstocks that lower the carbon intensity of fuels produced at the site.

In November 2023, MPC (25%) and Archer-Daniels-Midland Co. (ADM; 75%) commissioned jointly owned Green Bison Soy Processing LLC’s soybean processing complex in Spiritwood, ND, which will supply the Dickinson renewables plant with about 600 million lbs/year of refined soybean oil—enough feedstock to produce about 75 million gal/year of renewable diesel—using crops sourced from local growers. Commissioned in late 2020 and achieving full-design operating capacity during second-quarter 2021, MPC’s Dickinson plant is equipped to produce 184 million gal/year of renewable diesel from corn oil, soybean oil, fats, and greases.

Prairie Energy Partners LLC, a subsidiary of Southern Rock Energy Partners LLC (SREP), in June 2023 let a contract to KBR Inc. to undertake a feasibility study for the operator’s proposed 250,000-b/d full-conversion, decarbonized refinery in Cushing, Okla., that will process US-produced light, sweet conventional and shale crudes into low-carbon transportation fuels.

Slated to be what the company describe as the US’ first truly green refinery upon startup, the proposed $5.56-billion project is scheduled for a 36-month construction period beginning in 2024 for commissioning in 2027.

Designed to produce about 91.25 million bbl/year (3.83 billion gal/year) of cleaner transportation fuels—including gasoline, diesel, and jet fuel—the decarbonized refinery would eliminate 95% of GHG emissions via proprietary processing and water technologies. It plans to run domestically produced light, sweet West Texas Intermediate (WTI) and sweet shale West Texas Light (WTL) and West Texas Condensate (WTC) crudes sourced from Anadarko, Permian, Denver-Julesburg, and Bakken basins.

Unlike most conventional refineries that power process heating units with natural gas, Prairie Energy Partners’ planned refinery would instead combine pure oxygen with blue hydrogen (produced from refinery offgases) and green hydrogen (from electrolysis) to yield a primary-waste stream of steam.

Alongside including an associated CCS system for its hydrogen complex, the refinery also would be powered by 100% renewable electricity, either sourced from the grid or generated on-site from recycled and repurposed waste heat or geothermal and solar assets.

Prairie Energy Partners said the 250,000-b/d decarbonized refinery would include the following major installations:

A crude distillation unit consisting of two 125,000-b/d process trains.
Naphtha, diesel hydrotreaters.
Isomerization units.
Continuous catalytic reformers.
Hydrocrackers.
Renewable diesel unit.
Autothermal reforming-based hydrogen complex, associated CCS complex.
Water, wastewater production, and recycling complex.
On-site renewable-electricity production plant.

In line with reductions to US conventional refining capacity, LyondellBasell Industries Holdings BV confirmed in November 2023 plans to proceed with a potential plan to transition subsidiary Houston Refining LP’s (HRL) soon-to-be-shuttered 268,000-b/d Houston full-conversion refinery into a hydrogen production site as part of the proposed US government-funded HyVelocity regional hydrogen hub (Fig. 2).

Confirmation of LyondellBasell’s possible participation in HyVelocity follows $1.2 billion (of $7 billion in federal grants) awarded in mid-October to the project, which is sponsored by ExxonMobil Corp., Chevron Corp., Air Liquide SA, Mitsubishi Power Americas, AES Corp., Sempra Infrastructure, and Ørsted AS.

As development of the Houston refinery-to-hydrogen site remains ongoing, the operator said it will continue to evaluate other projects in line with its circular and low-carbon solutions business involving reuse of the refinery’s existing hydrotreaters, including:

Using LyondellBasell’s proprietary MoReTec advanced recycling technology to upgrade and purify mixed plastic waste into pyrolysis oil that can be used as feedstock for new plastic materials.
Using the same technology to upgrade and purify mixed plastic waste into pyrolysis gas that can be shipped via existing pipeline connections from the refinery to LyondellBasell’s nearby olefins manufacturing complex in Channelview, Tex., for use as feedstock in that site’s steam crackers.
Revamping the refinery’s existing hydrotreaters to process renewable-based feedstocks for production of renewable hydrocarbons that also could be transported to Channelview for use as feedstock to the site’s steam crackers.

With dedicated teams currently analyzing the various potential projects for the future use of the refinery, the company will proceed with normal routes for FID once those studies are completed. Previously slated for closure by yearend 2023, LyondellBasell has delayed ceasing operations at the Houston refinery until ‘no later’ than the end of first-quarter 2025.

In September 2023, ExxonMobil said it was continuing to develop a plan involving construction of a proposed grassroots low-carbon hydrogen production plant and CCS plant at its 584,000-b/d integrated refining and petrochemical complex along the Houston Ship Channel in Baytown, Tex., about 25 miles east of Houston. Part of ExxonMobil’s strategy to reduce emissions from its own and local industry operations, the proposed Baytown low-carbon hydrogen, ammonia, and CCS plant would allow the site to not only manufacture lower-emissions products for its own customers but also make surplus volumes of hydrogen and ammonia, as well as CO₂ storage capacity, available to nearby industry.

While it does not plan to reach an FID on the development until 2024, ExxonMobil has already licensed certain technologies for proposed units, as well as started discussions with third-party customers for offtake agreements from the project that, if approved, would reach startup in 2027-28.

Fresh US renewables capacity

Alongside proposing new renewables projects, US operators also brought fresh renewables production online in 2023.

In early November, Chevron Corp. subsidiary Chevron USA Inc. completed conversion and startup of an existing diesel hydrotreating unit for flexible production of renewable fuels at its El Segundo refinery in southern California. Now equipped with Chevron Lummus Global LLC’s (CLG) proprietary ISOTERRA technology—including catalyst and reactor internals—the newly converted diesel hydrotreater is capable of flexibly producing diesel from either 100% renewable or traditional crude oil feedstocks.

While neither CLG nor Chevron have officially confirmed capacity of the IOSTERRA unit, Chevron previously anticipated El Segundo’s converted diesel hydrotreater would reach 100%-renewable capability during 2023 with a renewable diesel production capacity of 10,000 b/d.

In its 2023 proxy statement to investors issued in April, Chevron said it also had completed concept selection and would be moving forward into FEED for a renewable fuels project at Chevron USA’s 369,000-b/d refinery in Pascagoula, Miss. While it did not disclose further details regarding the Pascagoula project, the operator said “other [unidentified renewable fuels] conversion projects at El Segundo and [its 257,000-b/d refinery in Richmond, Calif.] [had] intentionally been put on hold due to current economics.”

The renewable fuels projects collectively come as part of Chevron’s broader aim to grow its combined renewable fuels production capacity for renewable diesel, SAF, biodiesel, and other biofuels to 100,000 b/d by 2030 in line with its goals for a lower-carbon future.

In late June, PBF Energy Inc. and partner Eni SPA subsidiary Eni Sustainable Mobility SPA (ESM) started production at 50-50 joint venture (JV) St. Bernard Renewables LLC’s (SBR) new biorefinery co-located at PBF Energy subsidiary Chalmette Refining LLC’s 185,000-b/d dual-train co*king refinery in Chalmette, St. Bernard Parish, La (Fig. 3).

With an associated pretreatment unit at the site designed to process 1.1 million tpy of renewable materials such as soybean oil, corn oil, and other biogenically derived fats and oils into feedstocks, the partners said SBR’s Chalmette plant remained on track to ramp up to its full renewable diesel production capacity of 306 million gal/year by yearend.

In July, Vertex Energy Inc. began commercial sales of renewable diesel from the first phase of its renewable diesel conversion project at subsidiary Vertex Refining Alabama LLC’s 75,000-b/d refining and petrochemical complex in Mobile, Ala.

With a planned production capacity of 8,000-10,000 b/d, the first $115-million phase of the plant—which involved the conversion of a standalone hydrocracking unit at the refinery and reached mechanical completion in late March—produces renewable diesel from a primary feedstock of locally sourced soybean oil. The plant’s full design will enable production of renewable diesel from a range of organic, pretreated feedstocks that—alongside soybean oil—includes corn oil, meat tallow, and waste vegetable oils, among others, much of which Vertex plans to secure from local farmers and suppliers.

Currently under way, a second phase of the Mobile renewable diesel project will involve the addition of a new hydrogen plant to expand renewable diesel production to 14,000 b/d as part of Vertex’s strategy to foster a stable transition to renewable energy sources in line with the global energy transition while continuing to support the site’s existing infrastructure for production of conventional fuels. Slated for mechanical completion by yearend 2023, Phase 2 of the project is due to ramp up to full production capacity by early 2024 (Fig. 4).

In ongoing developments, Phillips 66 Co. said it plans to begin production of renewable diesel in early 2024 from its Rodeo Renewed project to convert the 120,000-b/d portion of its San Francisco conventional refining complex in Rodeo, Calif., into a renewable fuels refinery (Fig. 5).

Once operable, Rodeo Renewed will have a renewable diesel production capacity of more than 800 million gal/year (50,000 b/d). The refinery conversion project also has been designed to produce 20,000 b/d of SAF in addition to 10,000 b/d of renewable jet fuel for blending with conventional, crude oil-based jet production.

US conventionals

While the majority of investments undertaken by US refiners during 2023 focused on expanding renewables production, regional operators also continued to optimize existing conventional processing capacity.

In early April, Valero Energy Corp. started up a new 55,000-b/d delayed co*ker and sulfur recovery unit at the operator’s 395,000-b/d refinery in Port Arthur, Tex., to enhance the complex’s ability to process incremental volumes of sour crude oils and residual feedstocks (Fig. 6).

Anticipated to increase the refinery’s throughput capacity and slash the operator’s imports of vacuum gas oil, the $975-million Port Arthur delayed co*ker project involved creation of two independent combined crude distillation unit (CDU)-vacuum distillation unit (VDU) co*ker trains at the refinery that, in addition to improving turnaround efficiency, also aimed to reduce maintenance-related lost margin opportunity.

Rather than adding new crude processing to Port Arthur’s nameplate capacity, the delayed co*king project instead was designed to enable full utilization of the refinery’s existing CDU capacity, as well as the site’s yield of light products.

In mid-March, ExxonMobil completed startup of its long-planned project to expand light crude oil processing capacity by 250,000 b/d at ExxonMobil Product Solutions Co.’s integrated refining and petrochemicals complex along the US Gulf Coast in Beaumont, Tex. The $2-billion Beaumont expansion—completed on time and within budget despite difficulties posed by the global pandemic following the start of project construction in 2019—increases the refinery’s overall crude processing capacity to more than 630,000 b/d (Fig. 7). The expansion specifically added a third crude unit and hydrotreaters to accommodate the operator’s growing Permian light crude production, to which the refinery is linked via pipeline.

Canadian renewables

While most Canadian operators maintained earlier plans to proceed with renewables projects announced in previous years, shifting economic landscapes in 2023 resulted in confirmation of only a single new project, as well as cancellation of a separate development.

In January, ExxonMobil’s majority owned affiliate Imperial Oil Ltd. took positive FID to move forward with its previously proposed plan to build a grassroots renewable diesel production complex at the operator’s 196,000-b/d Strathcona refinery near Edmonton, Alta., in western Canada (Fig. 8).

At an estimated investment of about $560 million, the renewable diesel project will include construction of a new complex that combines low-carbon hydrogen—or hydrogen produced from natural gas with CCS technology—locally sourced renewable feedstocks, and a proprietary catalyst to produce more than 1 billion l./year (roughly 20,000 b/d) of low-carbon, renewable diesel for supply to British Columbia’s transportation sector and for reuse by the refinery itself.

Currently planned for startup in 2025, confirmation of FID on the Strathcona renewables project follows the operator’s previous 2022 contract awards to Fluor Corp. for delivery of FEED and engineering and procurement (EP), as well as Air Products Inc. for supply of low-carbon hydrogen to the complex.

In March, however, Calgary-based Parkland Corp. announced cancellation of its earlier plan to build a grassroots, standalone 6,500-b/d complex for production of renewable diesel at subsidiary Parkland Refining (B.C.) Ltd.’s 55,000-b/d refinery on Burrard Inlet in North Burnaby, near North Vancouver, BC.

Specific reasons Parkland cited for the project’s cancellation included rising costs, lack of market certainty around emerging renewable fuels, and the US Inflation Reduction Act (IRA) of 2022, the last of which advantaged US producers by providing longer-term policy certainty and incentives for investing in renewable fuels-production.

While the operator said it no longer planned to invest in further projects that would add renewable diesel capacity, Parkland confirmed it would continue expanding the Burnaby refinery’s ability to coprocess renewable feedstocks for production of drop-in renewable gasoline, diesel, and jet fuel products.

By yearend 2022, a series of debottlenecking works enabled the refinery to increase coprocessing volumes of Canadian-sourced biofeedstocks—including canola oil, tallow, and tall oil (a by-product from the pulp and paper industry)—by 30% to more than 2,000 b/d. Alongside ongoing debottlenecking works to boost Burnaby’s coprocessing volumes to a targeted 5,500 b/d, Parkland said it also is exploring expanding the refinery’s slate of potential renewable feedstocks to include other forest residuals, wastewater biomass, and carbon-capture liquids.

Parkland’s proposed coprocessing plans at Burnaby collectively come as part of the operator’s commitment to furthering both the province and Canada’s transition to lower-emission fuels and a lower-carbon economy, as well as the country’s national ambition to achieve net-zero emissions by 2050 in line with the global energy transition.

Mexico’s new addition

Following years of project development and construction, Mexico in 2023 began processing crude at the first phase of the Olmeca refinery in Dos Bocas, Paraíso, in the country’s southeastern state of Tabasco. Olmeca is the country’s first conventional crude oil refinery in 40 years (Fig. 9).

While the operating status of the refinery’s first phase—which completed construction in July 2022—has yet to be confirmed by either the government or state-owned Petróleos Mexicanos (Pemex), local media reported that by yearend 2023, the refinery will be producing about 290,000-b/d of gasoline.

Pemex said in October 2023 that the Olmeca refinery would be processing 320,000 b/d of the country’s own crude by yearend 2024.

First announced in 2018, the Dos Bocas refinery forms the cornerstone of Mexican President Andrés Manuel López Obrador’s National Refining Plan (NRP) to rescue Mexico’s national oil industry and enable complete energy independence and security. Plans for the greenfield coastal refinery envisioned 17 major plants designed to process 340,000 b/d of heavy (21-22° API), sour (3.4 wt % sulfur) Maya crude oil produced offshore southeast Mexico from Cantarell and Ku-Maloob-Zaap fields in the Bay of Campeche.