CVR delays renewable fuel startup at Wynnewood refinery

By Laura Sanicola

May 4 (Reuters) - A renewable diesel unit at CVR Energy's Wynnewood, Oklahoma, refinery will not be in service until the end of the third quarter due to severe weather in February and delays in equipment deliveries, the company said on Tuesday.

The unit was expected to start processing renewable diesel this July.

The U.S. refiner said it recently signed agreements for feedstock supply and terminalling and is in negotiations on product marketing for the project. It expects the project to cost between $135 million and $140 million, up from earlier estimates of $110 million.

The company is selecting the technology to add pretreatment capabilities at Wynnewood to process lower carbon-intensity feedstocks like inedible corn oil, animal fats and used cooking oil, Chief Executive David Lamp said Tuesday on the company's first-quarter earnings call.

"That will give us the flexibility to run just about anything, including corn oil, tallow, unused cooking oil, although there may not be much availability of that," Lamp said.

He said CVR will largely be using soybean oil, which has increased 30% in price since early April, due to its widespread availability over other feedstocks like used cooking oil.

A number of other refiners have plans to start or expand renewable diesel production in the next several years, but feedstock supply constraints remain an industry-wide issue.

CVR is also exploring renewable diesel production at its 132,000 barrel-per-day Coffeyville, Oklahoma, refinery and the possibility of using biomass as a feedstock for its renewable projects.

Lamp said he sees a geographic advantage for the refiner to use biomass, which includes wood chips, grass cuttings and corn stalks but added that "nobody really knows how to use it yet." (Reporting by Laura Sanicola; editing by Jonathan Oatis)