Valero, Darling evaluate development of Texas biorefinery

Valero Energy Corp. and Darling Ingredients Inc. are considering the development of a new biorefinery in Port Arthur, Texas, that would have the capacity to produce 400 million gallons of renewable diesel and 40 million gallons of renewable naphtha annually.  

Darling and Valero announced Sept. 9 that the companies have initiated an advanced engineering and development cost review for the proposed facility. The plant would be owned and operated by Diamond Green Diesel Holdings LLC, a 50/50 joint venture between the two companies that currently operates a renewable diesel plant in Norco, Louisiana.

According to Valero, the Port Arthur plant would be the first renewable diesel facility in Texas. The facility’s proposed location would leverage Valero’s existing refinery and optimize logistics management.

The final investment decision on the project is expected to be issued in 2021, subject to further engineering, obtaining necessary permits and approval by the boards of Valero and Darling. If the companies elect to move forward with the project, construction could begin in 2021 with operations commencing in 2024.

The Louisiana facility is currently being expanded to produce 675 million gallons of renewable diesel and 60 million gallons of naphtha annually. The new facility would boost the total renewable diesel production capacity of Diamond Green Diesel to 1.1 billion gallons. The company’s renewable naphtha production would reach nearly 100 million gallons.

“We expect low-carbon fuel mandates across the globe to continue to drive demand growth for renewable fuels,” said Joe Gorder, chairman, president and CEO of Valero. “This project would meaningfully expand our renewable diesel segment, which continues to generate strong results, and demonstrates our commitment to environmentally responsible operations.”

"The demand for a low carbon fuel solution continues to grow, as markets move to reduce their carbon intensity,” said Randall C. Stuewe, chairman and CEO of Darling Ingredients Inc. “Leveraging its proven technology, DGD continues to adapt and expand production to address that need for the benefit of our environment, our customers and our shareholders. Diamond Green Diesel has become the most efficient and immediate drop-in, low carbon fuel solution by capitalizing on the powerful combination of Valero's refining operations and marketing capabilities with Darling's integrated supply chain and raw material sourcing expertise.  With these complementary capabilities, Diamond Green Diesel has established itself as the leading industry standard in North America—providing a premier product to the world's expanding low carbon fuel markets."