Par Pacific, Mitsubishi, and ENEOS eye renewable fuels JV in Hawaii

Headquartered in Houston, Texas (TX), Par Pacific owns and operates 219,000 barrels per day (bpd) of combined refining capacity across four locations in Hawaii, the Pacific Northwest, and the Rockies, and an extensive energy infrastructure network, including 13 million barrels of storage, and marine, rail, rack, and pipeline assets.

In addition, Par Pacific operates the Hele retail brand in Hawaii and the “nomnom” convenience store chain in the Pacific Northwest. Par Pacific also owns 46 percent of Laramie Energy, LLC, a natural gas production company with operations and assets concentrated in Western Colorado.

Mitsubishi and ENEOS will form Alohi Renewable Energy, LLC, which will acquire a 36.5 percent equity stake in Hawaii Renewables in exchange for a cash consideration of US$100 million.

Par Pacific will retain the remaining interest and lead the project’s execution and operations through its affiliate, Par Hawaii Refining, LLC.

According to Par Pacific, the project’s attractive capital cost, along with its operating and distribution cost advantages, are key differentiators.

We are thrilled to partner with Mitsubishi and ENEOS through the formation of this strategic joint venture. Creating the Hawaii Renewables joint venture brings together the best of our three organizations and yields additional scale and expertise across feedstock origination, commercial optimization, and market access throughout the Pacific Basin, said Will Monteleone, President and CEO at Par Pacific.

Construction underway

Hawaii Renewables will leverage Par Pacific’s existing refining and logistics infrastructure and Lutros, LLC’s new and advanced pretreatment technology.

Construction is currently underway in Kapolei, and the facility is expected to be completed and operational by the end of the year.

Once fully operational, Hawaii Renewables will be the state’s largest renewable fuels manufacturing facility and is expected to produce approximately 61 million (US) gallons (≈ 231 million litres) per annum of renewable diesel, sustainable aviation fuel (SAF), renewable naphtha, and low-carbon liquified petroleum gases (LPG).

The facility is designed to produce up to 60 percent SAF as a first step toward decarbonizing Hawaii’s significant air travel market, with flexibility to process diverse feedstocks and shift yields to renewable diesel based on market conditions.

These renewable fuels will contribute to reducing greenhouse gas (GHG) emissions while providing reliable transportation and utility fuels to Hawaii consumers.

This strategic partnership will combine Par Pacific’s advantaged West Coast and Pacific asset base and operational capabilities with Mitsubishi’s global integrated business, including access to Mitsubishi’s Petro-Diamond Inc. Terminal in Long Beach, California (CA), and global feedstock procurement expertise.

We are so honored to partner with Par Pacific in the renewable fuels business. We view this partnership as an important step for our SAF initiative, supporting aviation sector decarbonization across Hawaii and beyond through our feedstock procurement and renewable fuels sales expertise, said Masaru Saito, Group CEO, Environmental Energy Group, Mitsubishi Corporation.

As Japan’s leading energy company, ENEOS will strengthen the partnership by leveraging its historical success in fuel refining and trading across Asia-Pacific and North America.

We anticipate that this project will deliver a stable supply of energy and contribute to a carbon-neutral society. ENEOS aims to contribute to this initiative by utilizing our deep experience in fuel refining and marketing, with an emphasis on enhancing Hawaii Renewable’s feedstock procurement capabilities, said Marcus Echigoya, SVP and Managing Executive Officer, ENEOS Corporation.

The closing of the joint venture transaction is subject to customary closing conditions and regulatory approvals. Lazard served as financial advisor to Par Pacific on this transaction.