Rentech to assume development of Port St. Joe biomass project
Rentech Inc. is in the process of acquiring the plans for a proposed 55-megawatt biomass power plant in Port St. Joe, Fla., from developer Biomass Energy Holdings.
The $225 million project was already intending to use the Rentech-SilvaGas biomass gasifier to convert woody biomass into power, so the Rentech ownership is a natural fit. “We thought it would be more appropriate to acquire the project and develop it instead of licensing our technology,” said Julie Dawoodjee, vice president of investor relations and communications for Rentech. In 2009, the company acquired 100 percent of SilvaGas Corp., along with its biomass gasification technology.
Rentech has acquired the Port St. Joe project for no initial consideration, but BEH may be eligible for repayment of a portion of its development costs, up to a maximum of $6 million, Dawoodjee said. Rentech has received a term sheet from the U.S. DOE under the Section1705 Title XVII Loan Guarantee Program.
The plant will run on 930 dry tons of wood per day and most of the power output has been contracted for sale to Progress Energy Florida under a long-term power purchase agreement, with a small fraction available for sale on a merchant basis, according to Rentech.
In light of the new acquisition, Rentech’s plans for its Rialto Project in Rialto, Calif., have been narrowed from production of power and renewable diesel or jet fuel, to just the fuel. “When we first brought Rialto to the marketplace, it was our first project on the biomass side,” Dawoodjee said, adding that Rentech wanted to maximize the production from the Rentech-SilvaGas process to demonstrate its capacity. “Now we’re demonstrating SilvaGas-to-power at Port St. Joe, so we can simplify Rialto to SilvaGas to Fischer-Tropsch to fuel.” Rentech is currently in discussions with several airlines for the purchase of the fuel produced at Rialto.
Construction on the Port St. Joe project is expected to begin in August with operation expected in 2013. The project is better qualified than the Rialto Project for a Section 1705 loan guarantee because of the program’s construction start requirement date of Sept. 30. The Port St. Joe Project has a simpler design and will have significantly lower capital costs and equity requirements, according to Rentech. The company will continue its due diligence for Rialto under the Section 1703 loan guarantee program, which does not impose the September construction deadline. Rentech is targeting a financial closing by the end of 2012 for Rialto, with support of the loan guarantee.