Chevron, Bunge Seek JV to Make Renewable Fuel from Soy
(Bloomberg) -- Oil giant Chevron Corp. and oilseed-and-grain company Bunge Ltd. agreed to pursue a joint venture to build a “farmer to fueling station” supply chain to meet demand for less-polluting renewable fuels.
Chevron would tap Bunge’s oilseed processing expertise and farmer relationships to gain a source of meal and plant-based oil that could be used to make diesel and jet fuel through the proposed partnership, according to a Thursday statement. Bunge is expected to contribute soybean processing facilities in Louisiana and Illinois, and Chevron expects to put about $600 million into the venture.
“This relationship with Chevron would enable Bunge to better serve our farmer customers by accessing demand in the growing renewable fuels sector,” Bunge Chief Executive Officer Greg Heckman said.
The two companies anticipate doubling the combined capacity of Bunge’s facilities from 7,000 tons per day by the end of 2024 through the partnership, according to the statement. The collaboration would also pursue new growth opportunities in lower carbon intensity feedstocks.
The joint venture positions Chevron “to expand into the renewable fuel feedstock value chain, which will advance our higher returns, lower carbon strategy,” Mark Nelson, Chevron’s executive vice president of downstream and chemicals, said.
Bunge shares surged 3.1% at 9:39 a.m. trading in New York, its biggest jump since July 28, while Chevron’s stock rose 1.2%.
© 2021 Bloomberg L.P.
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