Fulcrum awards Abengoa EPC contract for 10 MMgy biofuel plant

By Katie Fletcher | May 05, 2015

On May 5, Fulcrum Bioenergy Inc., announced it awarded Abengoa with a $200 million engineering, procurement and construction (EPC) contract for the construction of the Sierra Biofuels Plant, the company’s first waste-to-transportation fuel facility.

Abengoa will construct the plant under a fixed-price contract that guarantees the schedule, startup and performance of the plant. “Abengoa is a large, well-respected EPC firm with years of experience in the energy and biofuels industries and we are very pleased to be partnering with them on our Sierra project,” said Rick Barraza, vice president of administration with Fulcrum.

The Sierra Biofuels plant will convert 200,000 tons of municipals solid waste (MSW) into renewable syncrude that will be upgraded to more than 10 million gallons of jet fuel annually. The company currently holds 20-year feedstock agreements with Waste Management and Waste Connections, as well as an offtake agreement with Cathay Pacific Airways for 10 years.

According to Barraza, the company is looking to close financing within the next couple of months, and soon after will start construction. “Everything is in place to get the Sierra project under construction,” Barraza said. “Our feedstock is under contract, the offtake for fuel is under contract, we have secured the technology, we’ve demonstrated and proven our process, we’re nearing financial close and we'll be ready to start construction during the second half of this year.”

The financing Fulcrum is wrapping up in the coming months is a $105 million loan guarantee the USDA awarded the project last September. Around the same time last year, the company received a $70 million grant through a contract under the U.S. Department of Defense’s Defense Protection Act. The remaining balance of the construction capital will come from equity Fulcrum already has in place, Barraza said.

The Sierra Biofuels project consists of two facilities.  One facility is the biorefinery itself, and the other a feedstock processing facility. The feedstock processing facility will take in all of the garbage, removing inert materials like metal and glass, as well as high-value recyclables. The remaining material will be shredded and transported to the biorefinery.

The project is being built approximately 20 miles east of Reno, Nevada, in an industrial park in Storey County. “It’s a great location,” Barraza said.  “Northern Nevada provides a good base of construction and operational talent, and has been very receptive to our facility.”

The plant, scheduled for operation in the third quarter of 2017, is anticipated to create more than 500 engineering, construction and operations jobs in Nevada.

Barraza said that the Sierra Biofuels project is the company’s first commercial project, but will more than likely be the company’s smallest. “Our development program includes larger projects where we will have the capacity to produce 30 or 60 million gallons of fuel a year per facility,” he said. “We already have waste material under contract with our waste service partners throughout North America, so we are currently evaluating different sites where we have access to MSW to build our next facilities.”