Vertex Energy files for bankruptcy, seeks sale

Specialty refiner Vertex Energy has filed for chapter 11 bankruptcy in a US court following a failed foray into renewable fuels production at its 88,000 b/d Mobile, Alabama, refinery.

Vertex has entered into a restructuring support agreement with its lenders and secured $80mn of new funding to finance its day-to-day business operations, the company said late Tuesday.

The refiner is also considering a "more value-maximizing sale transaction" and expects to confirm its chapter 11 bankruptcy plan by the end of the year, according to the 24 September press release.

Vertex announced in May this year that it would "pause" renewable diesel production at its Alabama refinery and return the unit to producing fossil fuel products.

The company later said it would use a third quarter turnaround to return the Alabama plant's converted hydrocracking unit to processing fossil fuel feedstocks and be back online in the fourth quarter.

Vertex also operates a re-refinery near New Orleans, Louisiana, that produces low-sulfur vacuum gas oil (VGO) and multiple used motor oil (UMO) processing plants and collection facilities along the Gulf coast.

Refiners have faced mixed fortunes in recent years with their investments in renewable fuels after a glut of new supply flooded markets and depressed renewable credit prices.

US independent refiner Delek announced in August that it is temporarily idling three biodiesel plants in Texas, Arkansas and Mississippi as it explores alternative uses for the sites. Chevron said earlier this year it was indefinitely closing two biodiesel plants in Wisconsin and Iowa due to market conditions.

By Nathan Risser