Chevron, Bunge Propose Joint Venture to Create Renewable Feedstocks

OAKHURST, N.J. (DTN) -- Chevron U.S.A. Inc. and Bunge North America Inc. on Thursday announced a memorandum of understanding of a proposed 50/50 joint venture to help meet the demand for renewable fuels and develop lower-carbon-intensity feedstocks.

Upon finalization of the joint venture, Chevron and Bunge's partnership would establish a reliable supply chain from farmer to fueling station for both companies. Bunge is expected to contribute its soybean processing facilities in Destrehan, Louisiana, and Cairo, Illinois; Chevron is expected to contribute approximately $600 million in cash. Through the joint venture, the companies anticipate approximately doubling the combined capacity of the facilities from 7,000 tons per day by the end of 2024. The plan would also pursue new growth opportunities in lower-carbon-intensity feedstocks as well as consider feedstock pretreatment investments.

Under the proposed joint venture, Bunge will continue to operate the facilities, leveraging its expertise in oilseed processing and farmer relationships to manage origination and marketing of meal and plant-based oil. Chevron would have offtake rights to the oil to use as renewable feedstock to manufacture diesel and jet fuel with lower lifecycle carbon intensity, in addition to providing market knowledge and downstream retail and commercial distribution channels.

The creation of the proposed joint venture is subject to the negotiation of definitive agreements with customary closing conditions, including regulatory approval.