CVR Energy received approval from its board of directors in late December to go ahead with the renewable diesel project it has planned at its 74,500 b/d Wynnewood, Oklahoma, refinery, the company said in a statement.
The project involves converting the refinery's 18,200 b/d hydrocracker to make renewable diesel and renewable naphtha and is expected online by July 1, 2021.
"Upon completion, which is expected in mid-2021, the Wynnewood refinery should have the capability to produce nearly 100 million gallons of renewable diesel per year and more than 6 million gallons of renewable naphtha per year, significantly reducing its annual Renewable Identification Number exposure under the Clean Air Act's Renewable Fuel Standard," the statement said.
The project's capital costs will be about $110 million, or about $1.10/gal of renewable diesel capacity. CVR expects to recoup most of the project costs by the end of 2022 through the generation of RINs as well as the federal Blender's Tax Credit and California's Low Carbon Fuel Standard credits. It plans to rail the renewable diesel west into California.
"We are pleased to report that our board of directors has granted final approval on Phase 1 of our renewable diesel strategy," said Dave Lamp, CVR Energy's CEO.
"By leveraging assets already in place, particularly the existing hydrocracker unit and underutilized hydrogen plant at our Wynnewood refinery, we believe we can deliver one of the lowest cost renewable diesel projects in the industry."
The project is expected to produce more than 100 million gallons of renewable diesel and renewable naphtha annually, generating 170 million-180 million RINs.
"Between our existing blending capabilities and the RINs generated from renewable diesel, we expect our total net purchases would be less than 80 million RINs per year once the unit is up and running," said Lamp.
