Galp on track with Sines biofuel project

Portuguese energy company Galp Energia said that it is on track with the construction of 270 ktpa biofuels unit adjacent to its existing Sines refinery to produce HVO and sustainable aviation fuel (SAF).

“Investments amounted to €241m ($262m), directed mainly towards the execution of upstream projects, namely Bacalhau, and industrial low carbon developments in Sines, in particular the construction works in the Advanced Biofuels unit (HVO/SAF),” said the company in its second-quarter results announcement.

The Sines biofuels project is a joint venture between Galp and Mitsui. Galp took the final investment decision on the Sines biofuels unit in September 2023.

The unit will use waste residues to produce renewable diesel and SAF. The plant will use Axens’ technology and the consortium Technip Energies has been selected as the main Engineering, Procurement and Construction Management (EPCM) provider.

The total investments in the new plant are estimated at €400m ($435m).

The biofuels unit project is an addition to Galp’s existing Sines complex and is expected to improve the overall profitability of Sines refinery.

In the earnings call accompanying the 2Q results, Filipe Silva, company’s vice chairman and CEO, said that “[Biofuels unit] is an add-on on our current Sines complex, to basically boost the profitability overall from Sines … [and] the project is still well above the hurdle rate that we have in mind for long-term investments that we do, which is roughly 12%.”