REG opens 35m gal/year US biodiesel refinery

10 September 2008 19:36  [Source: ICIS news]

SEACREST, Texas (ICIS news)--Renewable Energy Group (REG), the largest biodiesel producer in the US, opened its new 35m gal/year refinery on Wednesday, bringing the company's renewable fuel output to more than 300m gal/year.

The Iowa-based company's newest plant, the ninth under the REG umbrella, is on the Houston shipping channel, giving it access to rail, highway and international waterways. 

With the addition of the Houston refinery, REG produces, manages and markets slightly more than 300m gal/year of the renewable fuel. 

That means the company would now be responsible for 20% of total US biodiesel production, REG president Nile Ramsbottom said.

CEO and chairman Jeff Stroburg said the company's reach and purchasing power allowed it to be the go-to supplier for buyers, allowing it to weather spikes in feedstock costs that have punctured smaller biodiesel producers.

 “We were doing worse when crude was at $130/bbl. So long as we meet our margins, oil prices aren't as important,” Stroburg told reporters.

Pure soy-derived biodiesel was assessed on 4 September at $4.10-4.30/gal ($1,235-1,295/tonne or €877-919/tonne) free on board (FOB) midwest for domestic material  and $3.90-4.10/gal ($1,174-1,295/tonne or € 834-877/tonne) FOB US Gulf, according to data from global chemical market intelligence service ICIS pricing. 

REG is currently running the plant at 85% capacity, but plans to increase production by next month, officials said.

It will refine soybean oil, canola oil and animal fat, and can be modified to accept algae oil. Stroburg said the company will sell most, if not all, of its output on the export market until US renewable fuel demand increases.

REG is also building refineries in New Orleans and Emporia, Kansas. Construction is temporarily halted until the current tightness in the credit markets loosens, Stroburg said.

($1 = €0.71)
By: Ben Lefebvre
+1 713 525 2653

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