The alliance between Chevron and Bunge (50/50) implies an investment of 600 million dollars, both companies announced this Thursday.
Bunge is the world’s largest oilseed processor.
The objective? Expand soybean processing capabilities in Illinois and Louisiana, United States, to provide more raw material for renewable fuel production.
The transaction will be conducted through ChevronUSA Inc., a subsidiary of Chevron Corporation, and Bunge North America, Inc.
Upon completion of the joint venture, the Chevron and Bunge partnership would establish a reliable supply chain from farmer to service station for both companies.
From Chevron’s perspective, Bunge is expected to contribute its soybean processing facilities in Destrehan, Louisiana and Cairo, Illinois, and Chevron is expected to contribute approximately $ 600 million in cash to the joint venture.
Through the alliance between Chevron and Bunge, the two companies plan to roughly double the combined capacity of the facilities to 7,000 tons per day by the end of 2024.
The joint venture would also seek new growth opportunities in lower carbon-intensive raw materials and consider investments in raw material pre-treatment.
Alliance between Chevron and Bunge
Under the proposed joint venture agreement, Bunge will continue to operate the facility, leveraging its oilseed processing expertise and relationships with farmers to manage the sourcing and marketing of plant-based flour and oil.
Chevron would have acquisition rights to the oil to use it as a renewable feedstock to make lower life cycle carbon-intensive diesel and jet fuel, as well as provide market insight and downstream retail and commercial distribution channels.
The creation of the proposed joint venture is subject to the negotiation of final agreements with customary closing conditions, including regulatory approval.
Chevron is one of the world’s leading integrated energy companies.