Phillips 66 plans reconfiguring of Rodeo refinery into renewable fuels plant

Phillips 66 plans to permanently cease processing of crude oil at the 120,000-b/d portion of its San Francisco refining complex in Rodeo, Calif. and convert the plant into a renewable fuels refinery as part of an investment strategy in the operator’s energy transition to ensure long-term viability and competitiveness of its operations.

Known as Rodeo Renewed, the proposed $750-800-million project would involve construction of new pretreatment units as well as repurposing of existing hydrocracking units to enable production of 680 million gal/year of renewable diesel, renewable gasoline, and sustainable jet fuel for the California market from a feedstock of cooking oil, fats, greases, and soybean oils delivered from global sources via the plant’s flexible logistics network of marine and rail terminals, Phillips 66 said.

Combined with production of renewable fuels from an unidentified project also in development, the converted Rodeo plant, once fully operational, would produce more than 800 million gal/year (50,000 b/d) of renewable fuels, making it the world’s largest plant of its kind, according to the operator.

Alongside the Rodeo conversion project, Phillips 66 said it also plans to shut down the Rodeo carbon plant and 44,500-b/d Santa Maria refining site in Arroyo Grande, Calif.—which converts heavy crude oil into high-quality feedstock for further processing into gasoline, diesel, and jet fuel at the Rodeo refinery—in 2023, with associated crude pipelines also to be taken out of service in phases starting in 2023.

Following completion of the reconfiguration project, Phillips 66’s San Francisco refining complex—which consists of the Rodeo plant in the San Francisco Bay Area and the Santa Maria refinery in Arroyo Grande, linked by a 200-mile pipeline—would no longer produce fuels from crude oil, resulting in anticipated 50% and 75% reductions in greenhouse gas and sulfur dioxide emissions, respectively, from the site as well as generation of credits under the California Low Carbon Fuel Standard (LCFS), Phillips 66 said.

“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, Phillip 66’s chairman and chief executive officer.

“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. This project is a great example of how Phillips 66 is making investments in the energy transition that will create long-term value for our shareholders,” Garland added.

If approved by Contra Costa County officials and the Bay Area Air Quality Management District, Phillips 66 said it expects renewable fuels production to begin in first-quarter 2024.

According to an Aug. 12 presentation from Phillips 66, conversion of the Rodeo refinery’s existing diesel hydrotreater—now under way—is scheduled to be completed by mid-2021, with final investment decision on the entire conversion project due sometime in during first-quarter 2022.

Phillips 66 said it currently is securing permits and completing its environmental impact report on the proposed Rodeo Renewed project, with an already submitted land-use permit application to be open for public comment during spring-summer 2021.