Oiltanking North America has signed a non-binding letter of intent (LOI) with cleantech company ReGen III to host a used motor oil re-refinery production facility at the Oiltanking Galveston County Terminal (OTGAL), in Texas City, US.
Under the terms of the LOI, Oiltanking will lease ground at OTGAL to ReGen III for the re-refinery, and design, construct, operate and contain storage tanks, loading and unloading pipelines, rail and marine loading and unloading facilities and other logistics assets for the re-refinery. Oiltanking and ReGen II will enter into a terminal services agreement.
The re-refinery will take used motor oil and re-refine it into clean base oils for the domestic market. Re-refining is different to recycling, which simply filters the oil to make a product usually only suitable for burning as a fuel. The re-refining process removes soluble and insoluble impurities, with the quality of the final product equal to, or even better than, virgin base oils. The process uses less energy than refining crude oil and contributes to a sustainable, circular economy, which is a key strategy of both Oiltanking and ReGen III.
ReGen III says that the conclusion of the ground lease and terminal services agreements with Oiltanking will provide ‘significant’ cost savings, as well as effectively outsourcing a large portion of its terminal logistics operations. Working with a high-profile company like Oiltanking will help to de-risk and advance the project. Koch Project Solutions (KPS) will provide project execution management services following a deal signed earlier in 2021, including leading ReGen III’s engineering, construction and licenced vendor teams (PCL Industrial Construction, Koch Modular Process Systems and Process Dynamics) through the detailed design, construction, commissioning, and start-up phases. ReGen III has also signed a definitive agreement with BP to purchase 100% of the base oils produced at the proposed re-refinery.
‘The signing of the LOI with Oiltanking, allows the company to advance its primary re-refinery project in the US Gulf Coast. We are excited to be working with a company of Oiltanking’s scale and reputation. When one considers Oiltanking operates 45 terminals in 20 countries and our offtake relationship with BP, the company looks forward to identifying additional re-refining facility siting opportunities globally and enhancing our industry presence,’ says Greg Clarkes, CEO of ReGen III.
Jerry Hardman, vice president, business development at Oiltanking adds: ‘The partnership with ReGen III is proof of Oiltanking’s ambition to actively shape the energy transition towards a circular and sustainable economy. With our high-quality engineering capabilities and our flexible, agile way of working, we are well equipped to support ReGen III by building and operating the storage and logistics assets associated with the re-refinery facility at the US Gulf Coast. We look forward to working with ReGen III to further develop the project and supporting their re-refinery ambitions leading to a more sustainable future.’