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Phillips 66 Plans to

transform San Francisco
refinery into world’s largest

renewable fuels plant

Phillips 66, a diversified energy manufacturing
and logistics company, announced today
that it plans to reconfigure its San Francisco
Refinery in Rodeo, California, to produce
renewable fuels.
The plant would no longer produce fuels
106 acres of proven undeveloped reserves business, has cemented them in the industry from crude oil, but instead would make
(PUDs) with roughly 50 locations at varying as a leader among small energy operators.” fuels from used cooking oil, fats, greases and
depths. HOMEBOUND RESOURCES, August 10, 2020 soybean oils.
The acquisition was made at a significant The Phillips 66 Rodeo Renewed project
discount to its estimated pre-COVID-19 would produce 680 million gallons annually
valuation and demonstrates HomeBound’s MIDSTREAM of renewable diesel, renewable gasoline, and
ability to acquire premium assets at a time sustainable jet fuel.
when some energy operators are struggling Summit Midstream Combined with the production of
due to depressed oil prices. renewable fuels from an existing project in
“At HomeBound, we understand that Partners reports second- development, the plant would produce greater
energy price fluctuations are inevitable and than 800 million gallons a year of renewable
try to price these events into our acquisitions. quarter 2020 financial and fuels, making it the world’s largest facility of
As an opportunistic investor, we seek its kind.
opportunities from distressed sellers, not operating results The project scope includes the construction
distressed assets,” said Stefan Toth, CEO of of pre-treatment units and the repurposing
HomeBound Resources. “Our value-investing Summit Midstream Partners announced of existing hydrocracking units to enable
strategy helps position us in a manner that today its financial and operating results production of renewable fuels. The plant will
can withstand volatility. Furthermore, with for the three months ended June 30, 2020, utilise its flexible logistics infrastructure to
reduced demand brought on by COVID-19, including net income of $56.7mn, adjusted bring in cooking oil, fats, greases and soybean
we’ve taken extra measures to increase our EBITDA of $64.6mn and DCF of $42.7mn. oils from global sources and supply renewable
storage capacity, enabling us to continue Net income included a $54.2mn gain from fuels to the California market. This capital
production while waiting for prices to early extinguishment of debt as a result of efficient investment is expected to deliver
rebound.” SMLP’s open market repurchases of senior strong returns through the sale of high value
The acquisition was made on behalf of an unsecured notes at discounts to par value. products while lowering the plant’s operating
energy-focused investment fund, sponsored Operated natural gas volume throughput costs.
by HomeBound and offered through Resolute averaged 1,391 mmcf per day and liquids “Phillips 66 is taking a significant step
Capital Partners, that invests in productive volume throughput averaged 76,000 bpd for with Rodeo Renewed to support demand for
regions with known oil and gas fields that the quarter. Increased quarterly operated renewable fuels and help California meet its
are too complex for small companies and not natural gas volume throughput was primarily low carbon objectives,” said Greg Garland,
large enough for many public companies. driven by seven wells that came online in chairman and CEO of Phillips 66. “We believe
HomeBound estimates the acquisitions’ March 2020 in the Utica shale segment, which the world will require a mix of fuels to meet
average lifting cost is below $15 per barrel, included a five-well pad site which generated the growing need for affordable energy, and
which mirrors many of its other operating aggregate production rates in excess of 160 the renewable fuels from Rodeo Renewed will
wells and enables HomeBound to be profitable mmcf per day for the majority of the quarter be an important part of that mix. This project
and make opportunistic acquisitions during as well as six wells turned-in-line upstream is a great example of how Phillips 66 is making
periods of reduced prices. of the TPL-7 Connector pipeline. Liquids investments in the energy transition that will
“HomeBound Resources has been an volume throughput was adversely impacted create long term value for our shareholders.”
exceptional partner for our energy platform, by approximately 14,000 bpd of temporary If approved by Contra Costa County
and we are pleased with their efforts to production shut-ins. Although producers are officials and the Bay Area Air Quality
effectively manage their energy portfolios,” starting to return previously shut-in wells to Management District, renewable fuels
said Thomas Powell, senior managing service, incremental volumes from previously production is expected to begin in early 2024.
partner and founder of Resolute Capital curtailed production are expected to be Once reconfigured, the plant will no longer
Partners. “Their disciplined approach to moderate in the near-term. transport or process crude oil.
identifying viable opportunities for investors SUMMIT MIDSTREAM PARTNERS, August 07, PHILLIPS 66, August 12, 2020
while incorporating highly effective risk 2020
management practices throughout their

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