Phillips66, the Texas based oil giant, announced last week it entered into an agreement to purchase the 100% of the soybean oil production of a plant in Iowa to secure its renewable fuels feedstock.
Firstly, the soybean plant is located in Butler County, in Iowa; it is called Shell Rock Soy Processing (SRSP) plant; and it is building a new crushing plant to process 40 million bushels of soybeans per year. Such production is the one to be sold to Phillips66.
Secondly, scheduled to begin production in late 2022, the plant will produce approximately 4,000 barrels per day of soybean oil; from which Phillips 66 will make renewable fuels.
Thirdly, the investment gives Phillips 66 a minority stake in the SRSP plant; which is still waiting for state and local approvals.
In addition, the plant will also produce 900,000 tons per year of soybean meal and hulls for livestock feed. It is geographically advantaged, as it will be located in one of the top soybean production states with rail options that provide direct access to diverse markets. As said above it will begin operations around December 2022.
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Phillips66 to play important role in renewable fuels and low carbon future
However, the agreement advances Phillips66 efforts in renewable fuels. As we reported previously, the company unveiled last year it plans to convert its Rodeo Refinery into a renewable fuels plant.
Moreover, when adapted, it will be capable of producing 800 million gallons per year of renewable diesel; also, renewable gasoline and sustainable aviation fuel. Phillips66 will do so through used cooking oils, fats, greases, vegetable oils and other feedstocks. The project, subject to permits and approvals, would be completed in early 2024.
On the other hand, the SRSP is projected to create 51 jobs with an average salary of $20.71 per hour. Additionally, just recently, the Iowa Economic Development Authority (IEDA) approved $4.1 million in state tax credits for the new soybean crushing plant.
Consequently, SRSP, the investment of Phillips66 represents a perfect platform to start a renewable fuels production. Such were the words of Mike Kinley, CEO of the soybean plant. “Phillips 66 represents what we believe to be the premier renewables platform, with a superior business plan and fantastic long-term prospects.”
Finally, Brian Mandell, Phillips 66 Executive Vice President of Marketing, said. “This strategic investment expands our reach into the renewable diesel value chain and provides secure feedstock. It also reflects our commitment to play an important role in a lower-carbon energy future.”