Delek Suspends Operations at Three Biodiesel Plants Temporarily

Independent U.S. refiner Delek has announced that it will temporarily idle its biodiesel facilities in Crossett, Arkansas; Cleburne, Texas; and New Albany, Mississippi. This decision comes as the company seeks "viable and sustainable alternatives" in response to the declining biodiesel market. According to Delek's Q2 results, this move is part of a broader strategy aimed at operational and cost optimization. The company has been undertaking a business transformation since 2022 to enhance its cost structure and operational efficiency.

Avigal Soreq, President and CEO of Delek US, highlighted the positive developments in their strategic initiatives. "We are pleased with the significant progress we've made in our 'Sum of the Parts' strategy," Soreq said. This strategy includes the recent sale of Delek's retail business to FEMSA, following a comprehensive review of their retail assets. Additionally, Delek US and Delek Logistics (DKL) have successfully executed "win-win" contract amendments and extensions. They also completed the drop-down of their interest in the Wink to Webster pipeline.

The combination of these moves—selling the retail business, dropping down the Wink to Webster pipeline interest, and renegotiating contracts—will result in a cash infusion of over $500 million for Delek US. This financial boost is expected to be achieved with minimal impact on standalone EBITDA. Meanwhile, DKL's strategic actions, including contract extensions, acquiring the Wink to Webster interest, establishing a new processing plant, and acquiring H2O Midstream, are set to bolster its cash flow growth and distribution performance, positioning it favorably among its peers.

Established in 2001, Delek US Holdings, Inc. is a downstream energy company with a wide range of assets, including petroleum refining, logistics, convenience stores, asphalt, and renewables. Delek takes pride in its culture of excellence, robust financial health, and proven growth trajectory. The company is dedicated to delivering outstanding value to both its customers and shareholders.

Delek's refineries and retail stores are primarily located in the southern and southwestern United States. However, company operations extend nationwide via its network of logistics hubs and refined product marketing, and Delek continue to grow its presence across the country. Delek's four inland refineries cater to local markets and various regional areas, including parts of Mexico, through our logistics network and selected third-party pipelines. Delek's refinery system obtains about 70% of its crude oil from the Permian Basin through a mix of third-party and Delek pipelines. To capitalize on its access to the Permian Basin, Delek is expanding its crude oil gathering operations in the Big Spring area.