MOSCOW (MRC) -- Chevron U.S.A. Inc., a subsidiary of Chevron Corporation, and Bunge North America, Inc., a subsidiary of Bunge Limited (NYSE: BG), announced today a memorandum of understanding (MOU) of a proposed 50/50 joint venture to help meet the demand for renewable fuels and to develop lower carbon intensity feedstocks, said the company.
Upon finalization of the joint venture, Chevron and Bunge’s partnership would establish a reliable supply chain from farmer to fueling station for both companies. Bunge is expected to contribute its soybean processing facilities in Destrehan, Louisiana, and Cairo, Illinois, and Chevron is expected to contribute approximately $600 million in cash to the joint venture. Through the joint venture, the two companies anticipate approximately doubling the combined capacity of the facilities from 7,000 tons per day by the end of 2024. The joint venture would also pursue new growth opportunities in lower carbon intensity feedstocks, as well as consider feedstock pretreatment investments.
“As the world’s largest oilseed processor, we are pleased to expand our partnership with an energy industry leader to increase our participation in the development of next generation, renewable fuels. Together, we share a commitment to sustainability and reducing carbon in the energy value chain. This relationship with Chevron would enable Bunge to better serve our farmer customers by accessing demand in the growing renewable fuels sector,” said Greg Heckman, Bunge CEO.
Under the proposed joint venture arrangement, Bunge will continue to operate the facilities, leveraging its expertise in oilseed processing and farmer relationships to manage origination and marketing of meal and plant-based oil. Chevron would have offtake rights to the oil to use as renewable feedstock to manufacture diesel and jet fuel with lower lifecycle carbon intensity, in addition to providing market knowledge and downstream retail and commercial distribution channels.
“Through our commercial work with Bunge, we have come to appreciate their strong company culture, their strategic desire to advance the production of lower carbon fuels, their commitment to capital discipline and promotion of sustainable agriculture in their supply chains,” said Mark Nelson, executive vice president of Downstream & Chemicals for Chevron. “Chevron’s proposed joint venture with Bunge positions us to expand into the renewable fuel feedstock value chain, which will advance our higher returns, lower carbon strategy."
The creation of the proposed joint venture is subject to the negotiation of definitive agreements with customary closing conditions, including regulatory approval.
As per MRC, Chevron and other partners said they are investing in a startup to build modular waste-to-green hydrogen and renewable synthetic fuel facilities in northern California with tentative plans to eventually grow worldwide. The USD20 million investment in Wyoming-based Raven SR is focused on technology to develop combustion-free, green hydrogen for transportation that is cleaner than so-called blue hydrogen derived from natural gas.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
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