Phillips 66 to convert San Francisco-area refinery to produce renewable fuels

Phillips 66 will convert its 120,200 b/d Rodeo, California, refinery to produce renewable fuels, becoming the latest US oil refiner to announce plans to reconfigure and repurpose an existing plant to make more environmentally friendly fuels.

The plant will no longer produce fuels from crude oil, but instead will process used cooking oil, fats, greases and soybean oils, according to the company’s Aug. 12 statement.

Named the Phillips 66 Rodeo Renewed project, the reconfigured refinery will produce 680 million gallons annually of renewable diesel, renewable gasoline and “sustainable” jet fuel.

“Phillips 66 is taking a significant step with Rodeo Renewed to support demand for renewable fuels and help California meet its low-carbon objectives,” said Greg Garland, Phillips 66 CEO.

“We believe the world will require a mix of fuels to meet the growing need for affordable energy, and the renewable fuels from Rodeo Renewed will be an important part of that mix,” he added.

Attractive returns

Phillips 66 expects the reconfiguration to “deliver strong returns through the sale of high value products while lowering the plant’s operating costs.”

Converting oil refineries to run renewable feedstock can make sense for some plants, considering current credits.

Producers of renewable diesel are eligible for the $1/gal Environmental Protection Agency’s Blenders Tax Credit (BTC). Adding in the value of California’s Low Carbon Fuel Standard credit, currently priced around $195/metric ton, gives renewable diesel a significant premium over regular diesel.

Also, a gallon of renewable diesel generates 1.5 Renewable Identification Numbers, helping a refiner meet its annual Renewable Volume Obligation (RVO) without buying RINs. .
Over 800 million gal/year

Combined with the production of renewable fuels from an existing project in development, Rodeo Renewed would produce more than 800 million gallons a year of renewable fuels, making it the world’s largest facility of its kind, according to the company.

Phillips 66 has already started converting the diesel hydrotreater at the plant to make renewable diesel.

Rodeo Renewed includes the construction of pre-treatment units and the repurposing of existing hydrocracking units. Existing plant logistics infrastructure will allow Phillips 66 to bring in feedstocks from global sources and supply renewable fuels to the California market.

The project needs approval from Contra Costa County officials and the Bay Area Air Quality Management District. Once approved, renewable fuels production is expected to begin in early 2024, the company said.

Phillips 66 will also shut the Rodeo carbon plant and the 44,500 b/d Santa Maria refining facility in Arroyo Grande, California, in 2023.

“Santa Maria is currently part of the Phillips 66 San Francisco Refinery and supplies Rodeo with intermediate products via a 200-mile pipeline,” the company said. “Associated crude oil pipelines will be taken out of service in phases starting in 2023.”
Source: Platts