Global Bioenergy Industry News
AE Biofuels to Reopen Cilion Ethanol Plant
The original $130 million plant was in November 2008, but in early 2009 the plant was closed.
AE Biofuels expects the Keyes plant to be operational in the first quarter of 2010.
AE Biofuels owns a cellulosic ethanol commercial demonstration facility in Butte, Montana that uses the company’s patent-pending enzyme technology to produce cellulosic ethanol from wheat straw, corn stalks and other agricultural waste. After the Keyes plant is restarted and becomes operational, AE Biofuels plans to deploy its proprietary cellulosic ethanol technology at the Keyes plant, subject to Cilion’s approval.
Under the terms of the project agreement, AE Biofuels or one of its subsidiaries will raise and spend $1.6 million to repair and restart the plant. In addition, the original contractor of the Keyes plant will contribute $1 million to the plant repair and restart project.
Once the plant is operational, AE Biofuels will pay Cilion rental payments of $3 million per year for three years.
Cilion has the one-time right to early terminate the lease after two years. The agreements also provide Cilion shareholders the right to convert up to 100% of their outstanding Cilion shares into 35 million shares of AE Biofuels’ common stock on or before June 30, 2011. AE Biofuels has approximately 89.5 million shares and 5.5 million options and warrants outstanding.
In January 2010, the permissible ethanol blend in California increases from a 5.7 per cent to 10 per cent, expanding the state’s ethanol market to approximately 1.5 billion gallons. The Keyes plant is a leader in environmentally responsible ethanol production. A study conducted by the University of California Berkeley concluded that the facility’s ethanol production process has a positive fossil energy ratio of 2.6:1.
In addition, the plant’s proprietary natural gas and steam powered turbine cogeneration unit will generate nearly all of the operating electric needs of the plant (4.7MW), thus eliminating dependence on the state’s electrical grid.
“AE Biofuels is currently producing biodiesel in India and supplying customers in Asia and Europe. The Keyes facility expands our operations in the U.S. at one of the premier ethanol production facilities in terms of technology, efficiency and environmental impact,” said Eric McAfee, chairman and CEO of AE Biofuels.
“In addition to serving California, the nation’s largest ethanol market, we believe AE Biofuels will be well positioned to accelerate the commercial deployment of our proprietary cellulosic ethanol technology through the conversion of existing corn ethanol facilities to integrated cellulosic/starch ethanol production.”
TheBioenergySite News Desk
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