Shell to convert Convent site to sustainable aviation fuel, renewable diesel production facility

• BY ROBERT STEWART | Staff writer Aug 23, 2022 theadvocate.com

Shell intends to build a sustainable aviation fuel and renewable diesel production facility at its shuttered Convent refinery, according to documents filed with Louisiana Economic Development.

Shell acknowledged in February that it planned to convert the old Convent site into an alternative fuels complex, though details were scarce at the time. However, the company on Monday filed requests with LED for a pair of state tax breaks — the Industrial Tax Exemption Program and Quality Jobs — that shed more light on potential plans for the plant. ITEP is a property tax break, while Quality Jobs offers rebates for creating new jobs.

Shell plans to use a “third-party proprietary alcohol-to-jet technology” at Convent that would transform ethanol into low-carbon sustainable aviation fuel and renewable diesel, according to LED records. The facility would source sugarcane ethanol as a primary feedstock while also having the capacity to turn corn ethanol into low-carbon fuels.

New equipment for the site will include reactors, heat exchangers, compressors, pumps and more. It will use existing pipelines and utilities.

Shell estimates construction would start in February 2025 and would finish by March 2028, assuming all goes to plan.

The LED requests don’t reveal how much of a tax break Shell would receive if their incentives are approved. However, Shell already has deals in place with St. James Parish to make payments in lieu of taxes, or PILOTs, for the next few years until its plans are finalized.

A Shell spokesman said Tuesday a final investment decision has not been made for the site.

Shell’s budget for the project is nearly $1.4 billion. About $886 million would go toward labor and engineering, while another $387 million would be directed to machinery and equipment. The rest is set for building and material costs.

The project would create 24 new jobs with an average salary of $91,333, as well as 512 construction jobs. Seven existing jobs remained at the site after its 2020 closure.

After failing to find a buyer for the site, Shell closed the Convent facility in 2020, which resulted in hundreds of layoffs and transfers to other sites. The shutdown was part of the company’s broader transition away from fossil fuels toward lower-carbon fuels.

At a state Board of Commerce and Industry meeting in February, a Shell executive said Convent would be a “hub of our low-carbon fuel production of the future.” The board approved a one-year extension of Shell’s existing ITEP contracts at the site so the company could attempt to bring the facility back into commerce.