Vertex Energy agrees five-year 100% offtake from planned Mobile renewable diesel production

In Texas, Vertex Energy, Inc. has entered into a 5-year product supply agreement with Idemitsu Apollo Renewable Corporation, a wholly owned California-based subsidiary of Idemitsu Kosan. The agreement is conditional upon certain conditions precedent, including the closing of Vertex’s planned acquisition of the Mobile, Alabama refinery as previously disclosed, and the completion of a subsequent conversion of the Mobile refinery’s hydrocracking unit, a project that will facilitate the production of renewable diesel fuel at the refinery, which is expected to be completed following the completion of the acquisition, by year-end 2022.

Under the terms of its supply agreement with Idemitsu, Vertex will supply 100% of the renewable diesel produced at the Mobile refinery to Idemitsu during the term of the agreement. Further, as indicated in the supply agreement, Idemitsu will pay Vertex for each gallon produced at an indexed, spot-market price at the time of production, resulting in an immediate working capital benefit to Vertex. At current commodity and credits values, and assuming the timely completion of the capital project and ongoing production at currently projected levels, the expected revenue over the five-year agreement would exceed $6 billion.