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Repsol (REPYY) and Bunge to Ramp-Up Renewable Fuel Supply
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Spanish energy giant Repsol (REPYY - Free Report) and Bunge Global S.A. (BG - Free Report) have decided to form a partnership to capitalize on the new opportunities aimed at meeting the rising demand for lower carbon-intensity feedstock used in the production of renewable fuel. By joining forces, both companies will work together to accelerate the expansion of renewable fuel production, keeping in mind the mandates provided by the European Union.
Details of the Agreement
As part of the agreement, Repsol will be acquiring a 40% stake in three industrial facilities in the Iberian Peninsula. The three facilities are owned by Bunge Iberica, a subsidiary of Bunge. The total consideration for the transaction is $300 million, with up to $40 million in contingent payments. The deal is subject to customary closing conditions.
Per the agreement, the three plants dedicated to the production of oils and biofuel will be operated by Bunge. These plants are located in Bilbao, Barcelona and Cartagena, near Repsol’s industrial complexes in the region. The collaboration allows Repsol to gain access to a wide portfolio of low-carbon intensity feedstock used in the production of renewable fuel. This also provides an immediate way to speed up the process of reducing emissions from transport, including cars, trucks, airplanes and shipping.
Contribution to Reduce CO2 Emissions
Repsol’s current production capacity of renewable fuel is around 1.1 million tons per year, which contributes to the reduction of CO2 emissions. Repsol’s current production capacity is estimated to save emissions equivalent to more than 1.7 million electric vehicles. The company expects to ramp up its output by up to 55%, reaching 1.7 million tons in 2027. Additionally, it is aiming to increase the availability of renewable fuel at its service station network, by installing pumps that offer 100% renewable fuel.
Expansion Plans and Initiatives
Repsol has the largest service station network in Spain, with more than 120 service stations with 100% renewable fuel. The company aims to expand the network to reach nearly 600 stations by the end of 2024 and 1,900 by 2027.
Repsol will also start a 250,000 tons-a-year advanced biofuel plant in Cartagena. This plant is the first of its kind in the Iberian Peninsula. In addition to the new unit, the company is upgrading the capacity of another unit at its industrial complex located in Puertollano, Spain to produce 200,000 tons of renewable fuel per year.
Through the alliance, the companies also plan to delve into other avenues of cooperation and project development. These initiatives will be aimed at increasing the potential availability of non-food lipidic feedstock for the renewable fuel market.
Management Comments
According to Repsol, this transaction will establish the company as a leader in the renewable fuel segment in the Iberian Peninsula. In addition, the company has emphasized the progress it has made toward reducing CO2 emissions by providing sustainable solutions to society quickly and efficiently.
Bunge highlights its extensive knowledge in the agri-food sector and global connectivity for renewable feedstock to create even better opportunities in the renewable energy space. It is strongly committed to the decarbonization of agricultural and oil supply chains in the industry.
Zacks Rank and Key Picks
REPYY currently carries a Zacks Rank #3 (Hold) while BG holds a Zacks Rank #4 (Sell).
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 125,000 miles, its network spans more than 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.
Helmerich & Payne is primarily involved in the contract drilling of oil and natural gas, with operations in all major U.S. onshore basins as well as in South America, Australia and the Middle East. In the past months, the company has secured eight new rig contracts with Saudi Aramco, thus expanding its presence in the Middle East. With plans to capitalize on unconventional drilling growth opportunities, the company’s outlook seems positive.
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Repsol (REPYY) and Bunge to Ramp-Up Renewable Fuel Supply
Spanish energy giant Repsol (REPYY - Free Report) and Bunge Global S.A. (BG - Free Report) have decided to form a partnership to capitalize on the new opportunities aimed at meeting the rising demand for lower carbon-intensity feedstock used in the production of renewable fuel. By joining forces, both companies will work together to accelerate the expansion of renewable fuel production, keeping in mind the mandates provided by the European Union.
Details of the Agreement
As part of the agreement, Repsol will be acquiring a 40% stake in three industrial facilities in the Iberian Peninsula. The three facilities are owned by Bunge Iberica, a subsidiary of Bunge. The total consideration for the transaction is $300 million, with up to $40 million in contingent payments. The deal is subject to customary closing conditions.
Per the agreement, the three plants dedicated to the production of oils and biofuel will be operated by Bunge. These plants are located in Bilbao, Barcelona and Cartagena, near Repsol’s industrial complexes in the region. The collaboration allows Repsol to gain access to a wide portfolio of low-carbon intensity feedstock used in the production of renewable fuel. This also provides an immediate way to speed up the process of reducing emissions from transport, including cars, trucks, airplanes and shipping.
Contribution to Reduce CO2 Emissions
Repsol’s current production capacity of renewable fuel is around 1.1 million tons per year, which contributes to the reduction of CO2 emissions. Repsol’s current production capacity is estimated to save emissions equivalent to more than 1.7 million electric vehicles. The company expects to ramp up its output by up to 55%, reaching 1.7 million tons in 2027. Additionally, it is aiming to increase the availability of renewable fuel at its service station network, by installing pumps that offer 100% renewable fuel.
Expansion Plans and Initiatives
Repsol has the largest service station network in Spain, with more than 120 service stations with 100% renewable fuel. The company aims to expand the network to reach nearly 600 stations by the end of 2024 and 1,900 by 2027.
Repsol will also start a 250,000 tons-a-year advanced biofuel plant in Cartagena. This plant is the first of its kind in the Iberian Peninsula. In addition to the new unit, the company is upgrading the capacity of another unit at its industrial complex located in Puertollano, Spain to produce 200,000 tons of renewable fuel per year.
Through the alliance, the companies also plan to delve into other avenues of cooperation and project development. These initiatives will be aimed at increasing the potential availability of non-food lipidic feedstock for the renewable fuel market.
Management Comments
According to Repsol, this transaction will establish the company as a leader in the renewable fuel segment in the Iberian Peninsula. In addition, the company has emphasized the progress it has made toward reducing CO2 emissions by providing sustainable solutions to society quickly and efficiently.
Bunge highlights its extensive knowledge in the agri-food sector and global connectivity for renewable feedstock to create even better opportunities in the renewable energy space. It is strongly committed to the decarbonization of agricultural and oil supply chains in the industry.
Zacks Rank and Key Picks
REPYY currently carries a Zacks Rank #3 (Hold) while BG holds a Zacks Rank #4 (Sell).
Some better-ranked stocks in the energy sector are Energy Transfer LP (ET - Free Report) and Helmerich & Payne (HP - Free Report) . Energy Transfer and Helmerich & Payne carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 125,000 miles, its network spans more than 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.
Helmerich & Payne is primarily involved in the contract drilling of oil and natural gas, with operations in all major U.S. onshore basins as well as in South America, Australia and the Middle East. In the past months, the company has secured eight new rig contracts with Saudi Aramco, thus expanding its presence in the Middle East. With plans to capitalize on unconventional drilling growth opportunities, the company’s outlook seems positive.