Independent US refiner Delek announces decision to ‘temporary idle’ three biodiesel facilities
Delek US plans to temporarily idle biodiesel facilities in Crossett, Arkansas; Cleburne, Texas; and New Albany, Mississippi due to a declining biodiesel market. This move aligns with Delek’s strategy to optimize operations and cut costs. The company’s recent Q2 results reflect progress in its transformation plan, including the sale of retail assets to FEMSA and contract amendments. These steps aim to secure over $500 million in cash, with minimal impact on EBITDA.
Independent U.S. refiner Delek has stated plans to ‘temporarily idle’ its biodiesel facilities in Crossett, Arkansas; Cleburne, Texas; and New Albany, Mississippi, while it investigates viable and sustainable alternatives.
As per media report, According to its Q2 results, the decision to idle these facilities was prompted by a decline in the overall biodiesel market and is in line with the company’s ongoing efforts to optimize operations and reduce costs.
Delek began a business transformation in 2022 aimed at improving cost structure efficiency.
“We are pleased with the significant progress we have made in our ‘Sum of the Parts’ initiative,” said Avigal Soreq, President and CEO of Delek US.
“We have completed the strategic review of our retail assets and announced the sale of our retail business to FEMSA. Additionally, Delek US & Delek Logistics have finalized beneficial contract amendments and extensions, as well as a drop-down of our interest in the Wink to Webster pipeline.
“These actions, including the retail sale, the drop-down of our Wink to Webster pipeline interest, and the amendments and extensions of contracts between DK and DKL, will result in a cash infusion of over $500 million for DK with minimal impact on standalone DK EBITDA.
“At the same time, contract extensions, the acquisition of the Wink to Webster interest, the new processing plant, and the acquisition of H2O Midstream will ensure that DKL maintains a strong position in terms of cash flow growth and distributions compared to its peers’
Source Link : https://bioenergytimes.com/independent-us-refiner-delek-announces-decision-to-temporary-idle-three-biodiesel-facilities/
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