Global Clean Energy Holdings (GCEH) purchased Alon Bakersfield Properties, a subsidiary of Delek US Holdings and the owner of the Alon Bakersfield Refinery, for $40 million.

According to an 8K filed with the SEC, Orion Energy Partners TP Agent served as administrative agent for a $300 million credit facility and a separate $65 million credit facility to support the acquisition.

Alon Bakersfield Refinery is an existing oil refinery located in Bakersfield, CA. Historically, the refinery has produced diesel from crude oil. GCEH will retool the refinery to produce renewable diesel from organic feedstocks such as vegetable oils. The facility, when repurposed as a renewable fuels refinery, will vertically integrate to produce renewable diesel from various feedstocks, including GCEH’s patented proprietary fallow land crop varieties of camelina. Traditionally, grown in rotation with wheat, camelina is cultivated as an alternative to fallow so as not to displace or compete with food crops. The balance of feedstock will be provided from various non-petroleum renewable feedstocks, such as used cooking oil, soybean oil, distillers’ corn oil and others.

No petroleum processing of any kind will occur hereafter at the refinery, either during or following the retooling effort. Instead, the refinery will be repurposed to become a producer of low-carbon renewable fuels that meet the needs of the California Low Carbon Fuels Standard. Fuels produced from the facility will result in reductions of both greenhouse gas (GHG) emissions and local air pollutants like particulate matter. The retooling is expected to take between 18 to 20 months to complete, with the primary work being conducted by union trades through a local Bakersfield EPC contractor, ARB, a Primoris Services Corp subsidiary.

As an existing oil refinery, the refinery already has a portion of the necessary equipment in place for the production of renewable diesel. An estimated 100 union tradesmen from a variety of crafts will be used to conduct a full turnaround and refurbishment of the necessary equipment to produce renewable diesel. Following startup, currently anticipated to be in late 2021, the repurposed refinery is expected to supply a portion of the demand for clean-burning alternative diesel fuels in California.

Fuels produced at the site will be available to be blended into the California transportation fuel mix. The blended fuel will reduce overall greenhouse gas emissions and other harmful local pollutants in the San Joaquin Valley and elsewhere in California. GCEH’s plan is to have the renewable fuels that are produced at the facility sold to, and thereafter, marketed and distributed through various partnerships, including one with a multinational oil major.

“We are thrilled to announce this exciting new venture in Bakersfield, California, a venture that leverages the region’s core competencies in agriculture and both traditional and alternative energy,” Richard Palmer, CEO of Global Clean Energy Holdings, said. “We expect that this project will be a catalyst for economic development and will generate both direct and indirect job opportunities in Kern County and the region.”