Delek US Holdings has sold AltAir Paramount, LLC and Delek’s Paramount, California refining and pipeline assets to an affiliate of Boston-based World Energy, LLC, a major biodiesel producer. The sale includes all of Delek’s membership interests in AltAir Paramount, LLC which operates a 3,000 barrel per day renewable diesel and renewable jet fuel facility, Delek’s idled Paramount refinery, and associated pipelines and storage tanks.

Based on Delek’s ownership interest in AltAir Paramount, LLC the transaction should result in expected proceeds to Delek of approximately $72.0 million, taking into consideration estimated working capital, Delek US’ portion of the biodiesel tax credit for 2017, and deal costs.

Established in 2013, AltAir Fuels was created to produce low carbon fuels and chemicals derived from sustainable feedstock. For its first commercial project, AltAir partnered with Alon Energy USA to use its existing refinery in Paramount.

AltAir retrofitted the existing refinery with process technology developed by Honeywell’s UOP to produce renewable biofuel. In 2016, United agreed to purchase up to 15 million gallons of sustainable biofuel from AltAir Paramount over a three-year period. (Earlier post.)

More recently, produced the renewable jet fuel for Qantas’ first dedicated biofuel flight between the United States and Australia. The 15-hour trans-Pacific flight operated with approximately 24,000 kg of 10% biofuel blend, saving 18,000 kg in carbon emissions. (Earlier post.)

Vandewater Capital Holdings, the lead investor and controlling shareholder of AltAir Fuels from its inception in 2013 until Delek acquired a controlling stake in October of 2015, brought AltAir from concept to a leading refinery of renewable fuels.

We have been focused on deriving value from our non-core assets in California as they are outside of our geographic footprint. This marks the second step in this process following the announced agreement to divest five west coast asphalt terminals for $75.0 million. The Paramount transaction provides additional cash to Delek and should enable us to reduce costs. We continue to evaluate options for our Long Beach and Bakersfield assets. Cash proceeds from this and future transactions could be used in our capital allocation program to return cash to shareholders.

—Uzi Yemin, Chairman, President and CEO of Delek

Delek US Holdings, Inc. is a diversified downstream energy company with assets in petroleum refining, logistics, asphalt, renewable fuels and convenience store retailing. The refining assets consist of refineries operated in Tyler and Big Spring, Texas, El Dorado, Arkansas and Krotz Springs, Louisiana with a combined nameplate crude throughput capacity of 302,000 barrels per day.

The logistics operations consist of Delek Logistics Partners, LP. Delek US Holdings, Inc. and its affiliates also own approximately 63% (including the 2 percent general partner interest) of Delek Logistics Partners, LP. Delek Logistics Partners, LP is a growth-oriented master limited partnership focused on owning and operating midstream energy infrastructure assets.

The convenience store retail business is the largest 7-Eleven licensee in the United States and operates approximately 300 convenience stores in central and west Texas and New Mexico.