SquareOne Announces Advanced Development of Its Modernized Used Oil Recycling Facility

Source: www.gulfoilandgas.com 8/25/2022, Location: North America

- SquareOne Energy, LLC announces development of its innovative used oil recycling facility, which will be the first process in the U.S. to recycle used oil materials into clean on-road fuel products
- Sunoco LP, a leading national fuel distribution company, has entered into a multi-year offtake agreement to purchase all SquareOne’s ultra-low sulfur diesel and naphtha products
- The Company’s initial facility will be constructed in the Philadelphia region at PBF’s active refined products terminal location in Paulsboro, NJ; the PBF site will provide substantial benefits namely through existing infrastructure and multi-modal access, which will position SquareOne to be operational in 1H24
- The Company has secured used oil feedstock commitments for over 60% of its plant inlet capacity, and expects to be fully contracted at the point of full operation
- SquareOne will generate strong cash flow margins from its advanced processing operations with future added benefit from potential low carbon fuel credits

SquareOne Energy, LLC announced the development of its initial discarded and used oil recycling facility in the Philadelphia region, the first to serve the northeast U.S. and mid-Atlantic markets. The facility will feature the most advanced process in the re-refining industry and create a holistically sustainable approach for re-energizing wasted oil. The Company will accomplish this by converting a wide array of used oils and other waste hydrocarbon streams into clean transportation fuel products, primarily ultra-low sulfur diesel (“ULSD”). SquareOne’s ULSD, which will meet Colonial Pipeline specifications, will be available for immediate delivery into vehicles, transportation pipelines, and marine vessels, making SquareOne the first facility in the nation to recycle discarded oil into high quality on-road fuel.

SquareOne’s facility will be constructed on an active refined products terminal site in the Philadelphia region owned and operated by PBF Logistics LP (NYSE: PBFX) and PBF Energy Inc. (NYSE: PBF) (collectively, “PBF”). PBF’s terminal, located in Paulsboro, NJ, provides the Company strong benefits from its existing infrastructure, multiple modes of transport access and comprehensive utilities, substantially reducing the development cost of the Company’s new recycling facility. By leveraging the significant advantages of the existing infrastructure, the facility is expected to be operational in the first half of 2024.

SquareOne’s Innovative Process and Initial Recycling Facility
SquareOne is a Philadelphia-based independent enterprise formed to create a progressive solution to address the critical issue of used oil disposal and processing in the U.S. The Company recognizes the existing used oil re-refining industry needs an innovative approach to a) broaden the waste streams that are recycled and b) advance the products created from these feedstock materials. According to government studies, as much as one-third of used oil is either burned or illegally disposed, causing significant environmental harm to the ground and waterways. As such, significant energy potential from these previously refined hydrocarbons is wasted. As the country aggressively pursues steps towards energy transition to a cleaner future, so must the used oil re-refining space, which SquareOne is addressing through its advanced recycling process and move beyond existing, less complex technologies in the industry.

The Company’s facility design will have a sophisticated front end and pre-treatment stage, which will enable the facility to accept and process numerous types of recyclable feedstocks, many of which are currently being improperly disposed. SquareOne’s wider array of recyclable feedstocks differentiate it from the existing re-refiners that traditionally only process used motor oil. Acceptable feedstock materials, in addition to used motor oil, will also include residual marine oils and more unmarketable material (unusable distillates combined with gasoline) as well as various other off-spec and distressed hydrocarbons.

SquareOne will also license proven technology for its facility, delivering the cleanest set of product yields in the U.S. re-refining industry. The Company’s primary product will be pipeline-spec ULSD, with associated products including low sulfur naphtha and high viscosity Group III base oil blendstock.

John Sadlowski, President and Chief Executive Officer of SquareOne, stated, “We are very excited to confidently move forward on the development of our state-of-the-art recycling facility which will better serve the industry and provide a long overdue environmentally focused solution for processing used oil and other discarded energy. Our Philadelphia facility will be the first used oil recycling operation in the Northeastern U.S. as well as the most advanced and capable recycling asset in the country, processing a broad spectrum of feedstock streams for our local communities into clean fuel products much needed by the transportation industry.

“We are fortunate to have partnered with strong organizations in PBF and Sunoco, who have enabled us to take critical steps towards full operation of our facility. SquareOne is committed to providing a highly sophisticated and practical solution to capture and transform waste oil into cleaner energy, while supporting our local communities through proper outlets for used oil disposal and creating new job opportunities. After years of support and dedication from our Company’s management, operating team and capital partners, we are fully prepared to execute our plan to build our initial facility and are already pursuing additional opportunities in other regions where similar innovative solutions are needed.”

Sunoco Products Offtake Partnership
Concurrent with the development of the SquareOne facility, the Company has entered into an offtake agreement with Sunoco LP (NYSE: SUN) (“Sunoco”), the largest independent fuel distributor in the U.S. Sunoco will purchase and market all the Company’s recycled ULSD and naphtha products that are generated from SquareOne’s facility on the Paulsboro site. This commitment from Sunoco provides strong validation of SquareOne’s vision and process design through conversion of problematic feedstock streams into clean and fully usable on-road fuel. SquareOne will also benefit from Sunoco’s extensive marketing and distribution channels to realize the environmental value of the Company’s recycled fuel.

Initial Site for SquareOne Development
SquareOne’s new facility will be situated on PBF’s active refined products terminal site in Paulsboro, NJ (the “Paulsboro site”). The Paulsboro site serves as an ideal location for SquareOne to construct its initial facility, as it provides multiple characteristics that substantially reduce the Company’s development and ongoing operating costs. SquareOne’s facility will strongly benefit from the logistics of the Paulsboro site, which is situated in an advantaged location in the Philadelphia area, enabling more effective service to the Northeastern U.S. markets. Furthermore, the Paulsboro site provides comprehensive logistical flexibility, including full access to deepwater docks on the Delaware River and an active rail terminal.

The Company will gain valuable access to and utilize various components of PBF’s existing infrastructure on the Paulsboro site. The site provides a centralized land position that will house the plant’s processing units, available storage tank capacity for both feedstock material and finished products, access to the site’s existing marine, rail, and truck rack, core utility needs, wastewater and H2S treatment, as well as assistance for ontake/offtake of materials and product.

Environmental and Social Benefits to the Community
SquareOne’s groundbreaking project brings a fresh vision for sustainability to historically abandoned feedstock materials. Traditionally, many discarded oil materials have been improperly disposed of, leading to harmful environmental consequences. SquareOne’s highly flexible processing capabilities will drive the elimination of these practices by providing economic and environmentally beneficial solutions for those who generate or aggregate such material. By working closely with communities, municipalities and both local and national organizations, the Company plans to build awareness and greater access to resources for proper disposal of used and other discarded oils. SquareOne is initiating programs with local, county and state officials to provide for the efficient collection of these feedstock streams in the wider region.

“I believe that we are bringing a paradigm shifting set of values and perspective to the industry. The clear environmental and cultural benefit is palpable and will have a positive effect on the entire sector and help power us into a sustainable future”, stated Amanda Moninghoff, Founder and Executive Vice President of SquareOne.

SquareOne plans to bring new jobs with a variety of opportunities at various skill levels to the communities in which it will operate. These sustainable infrastructure jobs will offer upward mobility and advanced training, providing support and skills to a workforce meeting the challenges of energy transition.

Current Development Process
SquareOne is currently finalizing its FEL-2 engineering process for the Paulsboro facility and is working towards finalizing its engineering contract, as well as its potential commercial arrangement with PBF. The Company has partnered with the Axens Group, a worldwide leader in refining, renewables, recycling and petrochemical technologies, to license its existing designs for the front-end pre-treatment facility and hydrocracker unit. SquareOne has identified project financing capital and anticipates initiating construction in late 2022.

Project Funding & Strategic Advisors
PhiCap Advisors, LLC, a Philadelphia-based capital advisory firm, serves as the Chief Financial Officer for SquareOne, and has led the comprehensive business development and fundraising process for the engineering and construction of the Company’s initial facility in the Philadelphia area. The funding process has included the completion of Series A and B development rounds of over $12 million in combined investment capital, as well as coordinating the full project financing for the Philadelphia plant.

King & Spalding is serving as project and engineering legal counsel to SquareOne. Royer Cooper Cohen Braunfeld LLC is acting as legal counsel on capital financing for the project. Shearman & Sterling also provided legal counsel on company matters to SquareOne. Parker McCay is serving as legal counsel to the Company on environmental and permitting efforts.

SquareOne Management Profiles
John Sadlowski, President & Chief Executive Officer – John Sadlowski is currently serving as President and Chief Executive Officer of SquareOne and has 20 years of oil industry experience. Prior to joining SquareOne, he held a progressive series of commercial management positions at Philadelphia Energy Solutions with responsibility across the whole barrel, ultimately serving as Chief Commercial Officer, in which he oversaw all commercial operations around the company’s refining complex. Prior to his experience at Philadelphia Energy Solutions, John worked at Sunoco from 2004-2012 where he initially worked in the Office of Investor Relations and soon matriculated to the trading floor. John began his career in Financial Consulting at Arthur Andersen and holds a degree in Economics as well as an MBA in Finance from La Salle University.

Amanda Moninghoff, Founder & Executive Vice President – Amanda developed the concept and vision for SquareOne’s operations to recycle used oil into environmentally friendly fuels. Amanda brings valuable and extensive experience in the public sector, notably in the U.S. Senate office in Delaware, where she specialized in strengthening communities through federally supported solutions. Amanda attended Northeastern University, where she obtained a degree in Political Science, concentrating in Legal Studies.

Steve Herzog, Chief Operating Officer – Steve holds over 40 years of notable experience and engineering leadership in the refined products industry, including strategic planning & execution, and facility design & management. Most recently, Steve led Philadelphia Energy Solutions as Senior Vice President of Strategic Planning. Steve also acted as Refinery Manager for Sunoco’s Philadelphia, Marcus Hook (PA) and Eagle Point (NJ) facilities. Steve holds a degree in Chemical Engineering from the University of Washington, and an MBA from Villanova University.

Brian Begley, CFA (PhiCap Advisors, LLC), Co-Chief Financial Officer - Brian is a Co-founder and Partner at PhiCap Advisors, LLC, and brings over 25 years of experience in capital markets activity, corporate finance and M&A transactions. PhiCap Advisors is a Philadelphia-based capital and management advisory firm that specializes in clean energy and energy transition clients. Brian served as Vice President of Investor Relations and Capital Markets for Atlas Energy and its subsidiaries, where his team managed numerous IPO’s and capital raises in the upstream and midstream oil & gas industry. Brian holds a degree in Accounting from Villanova University and is a CFA Charterholder.

Jeffrey Slotterback, CPA (PhiCap Advisors, LLC), Co-Chief Financial Officer – Jeffrey is a Co-founder and Partner at PhiCap Advisors, LLC, and brings substantial financial leadership to the Company. PhiCap Advisors is a Philadelphia-based capital and management advisory firm that specializes in clean energy and energy transition clients. Jeffrey served as CEO and CFO for several companies in the Atlas Energy oil & gas group, where he helped lead over 20 asset acquisitions and disposals, several IPOs, multiple corporate monetizations, and SPAC business combinations. Jeffrey holds a degree in Accounting from Muhlenberg College and is a licensed CPA in Pennsylvania.


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