Phillips 66PSX has teamed up with Ryze Renewables to construct twin renewable diesel fuel facilities in Nevada.
The construction of the plants is underway. Once the plants are commissioned, they will utilize agricultural oils and animal fats to produce high-cetane renewable diesel fuel. A patented hydrogenation technology that is more competent compared with the current conversion processes will be used.
On completion, the two Ryze Renewables facilities are anticipated to yield a combined 11,000 barrels per day (BPD) of renewable diesel fuel. This fuel will be transported to themarkets in the Western U.S. and Canada.
Per the long-term supply and offtake agreement between the parties, Phillips 66 will provide feedstock to the plants and transfer 100% of the renewable products to consumers in West Coast markets.
Renewable diesel fuel is not required to be mixed with traditional diesel like current biodiesels. Moreover, production of renewable diesel emits lower overall emissions compared with other biofuels, which corresponds to a low-carbon intensity (CI) score and optimizes the low-carbon fuel standard (LCFS) credit from the California Air Resources Board.
The first plant in Reno is anticipated to be brought online in mid-2019. The other facility in Las Vegas will be commissioned in early 2020.
The construction of these two plants is estimated to create employment for more than 750 personnel. Post completion, the plants will add more than 140 permanent jobs in the Reno and Las Vegas areas.
With increasing agitation related to emissions by the energy companies, the oil giants are trying to diversify into other renewable sources of power.
Concerns about climate change and extreme weather events like hurricanes, wildfires and droughts are high. According to scientists, these calamities are a result of global warming. These factors are propelling the companies to add low-carbon products and services to their businesses. Phillips 66's partnership in these projects emphasizes its commitment towards shareholder value creation.
In the past year, Phillips 66's shares have surged 43.5% compared with the industry 's 54% rise.
Zacks Rank & Stocks to Consider
Phillips 66 currently carries a Zacks Rank #3 (Hold).
A few better-ranked players in the same sector are Petroleo Brasileiro S.A. PBR , or Petrobras SA, Helix Energy Solutions Group, Inc. HLX and TC Pipelines, LP TCP . All these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Petrobras is the largest integrated energy firm in Brazil and one of the major players in Latin America. It pulled off an average positive earnings surprise of 10.4% in the last four quarters.
Helix Energy offers specialty services to the offshore energy industry. The company delivered an average positive earnings surprise of 66.7% in the trailing four quarters.
TC Pipelines purchases, owns and actively participates in the management of U.S.-based natural gas pipelines and related assets. The company delivered an average positive earnings surprise of 3.7% in the last four quarters.
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