HollyFrontier Corp. is building a new renewable diesel unit (RDU) at its 100,000-b/d Navajo refinery in Artesia, NM.
The RDU will have a production capacity of about 125 million gal/year, enabling the refinery to process soybean oil and other renewable feedstocks into renewable diesel, HollyFrontier said.
The proposed investment will provide HollyFrontier the opportunity to meet demand for low-carbon fuels while covering the cost of the operator’s annual RIN purchase obligation under current market conditions, the company said.
HollyFrontier said it expects the RDU project, which will include corresponding rail infrastructure and storage tanks, is estimated to have a total capital cost of $350 million.
To be funded with cash on hand and anticipated to generate an internal rate of return between 20-30%, the project is scheduled to be completed during first-quarter 2022.