Rentech: Biofuels Digest’s 5-Minute Guide

November 12, 2012 |

Address: 10877 Wilshire Blvd. Suite 600, Los Angeles, CA 90024

Year founded: 1981

Company description:

The Company’s Rentech-SilvaGas and Rentech-ClearFuels biomass gasification process can convert multiple biomass feedstocks into synthesis gas (syngas) for production of renewable fuels, power and chemicals. Combining the gasification process with Rentech’s application of syngas conditioning and clean-up technology and the patented Rentech Process based on Fischer-Tropsch chemistry, Rentech offers an integrated solution for production of synthetic fuels from biomass.

The Rentech Process can also convert syngas from fossil resources into ultra-clean synthetic jet and diesel fuels, specialty waxes, and chemicals. Final product upgrading and acid gas removal technologies are provided under an alliance with UOP, a Honeywell company. Rentech is developing projects and offers licenses for these technologies for application in synthetic fuels and power facilities worldwide. Rentech Energy Midwest Corporation, the Company’s wholly-owned subsidiary, manufactures and sells nitrogen fertilizer products including ammonia, urea ammonia nitrate solution and liquid and granular urea in the Mid Corn Belt region of the central United States.

Major Investors
Rentech has been publicly traded since 1991. The stock trades on the NYSE AMEX under the symbol RTK. Our largest institutional holders are BlackRock Institutional Trust Company, Vanguard Group, Inc., Black Investment Management (UK) and Wellington Management Company.

Type of Technology(ies)

Biomass Gasification: Rentech-SilvaGas biomass gasification process is a patented, commercially proven gasification technology with over $100 million invested in technology and assets. The gasifier can process a wide variety of cellulosic feedstocks to produce syngas. The syngas can be used to produce renewable power or it can be processed through the Rentech Process to produce drop-in, certified, renewable fuels. The gasifier has successfully operated in Burlington, VT for over 2 years in partnership with the Department of Energy (DOE), National Renewable Energy Laboratory (NREL) and Battelle Columbus Laboratory.

The Rentech-ClearFuels biomass gasification technology produces hydrogen as well as syngas from cellulosic feedstocks through the use of a High Efficiency Hydrothermal Reformer (HEHTR). The Rentech-ClearFuels biomass gasification technology is very flexible and versatile which integrates easily and efficiently with other advanced biofuel technologies. The syngas can be used to produce renewable power or be processed through Rentech’s technology to produce renewable drop-in fuels. The Rentech-ClearFuels technology has operated at pilot scale in excess of 10,000 hours and multiple third parties including, Idaho National Laboratory and Hawaii Natural Energy Institutehave independently validated the results of the pilot scale data. The HEHTR operating temperature is also below ash softening temperatures, which avoids slagging/fouling concerns. The gasifier will be demonstrated at our PDU facility by the end of 2011.

Syngas Cleanup: Rentech has novel and patent-pending technologies for the cleanup of syngas required for the production of synthetic fuels from biomass-derived syngas.

Synthetic Fuels: The Rentech Process can convert syngas from fossil resources into hydrocarbons which can be processed and upgraded into ultra-clean synthetic jet and diesel fuels, specialty waxes and chemicals. Rentech’s $85 million Product Demonstration Unit in Colorado produces 10 barrels per day of certified synthetic jet and diesel fuels.

Feedstocks:
The Company’s Rentech-SilvaGas biomass gasification process has been demonstrated to produce syngas from biomass feedstocks such as wood waste, green waste, agricultural waste, refuse derived waste, straw, switch grass and energy crops. The wide range of feedstocks acceptable by the gasifier will allow it to be used in a wide variety of applications today and in the future.

The Rentech-ClearFuels’ biomass gasification technology has been demonstrated to produce syngas from virgin biomass feedstocks such as wood wastes, sawdust, bark, sugarcane bagasse, rice hulls and straw, corn stover and other clean biomass. Unlike biochemical processes, the primary driver is carbon in any form, with no difference in lignin, cellulose, or hemicelluloses.

Rentech’s Fischer-Tropsch process can process syngas derived from any carbon-bearing feedstock such as biomass, municipal waste and natural gas into hydrocarbons which can be processed and upgraded into ultra-clean synthetic jet and diesel fuels, specialty waxes and chemicals.

Products

Drop-in clean synthetic fuels: Rentech produces drop-in synthetic diesel fuel that meets ASTM-975 specs. Rentech’s synthetic jet fuel has been certified by the FAA for commercial aviation use and by the U.S. Air Force for use in its aircraft. All fuels produced by the Rentech Process can be distributed and used in existing infrastructure including pipelines and engines and are cleaner burning than traditional petroleum-derived fuels. Rentech’s ultra low sulfur diesel fuel, or RenDiesel, is environmentally friendly. RenDiesel is biodegradable, exceeds all global sulfur requirements and has no aromatics.

Rentech, through the Rentech F-T Process, can produce renewable specialty chemicals such as naphtha, olefins, paraffins, and waxes.

Rentech can produce renewable power from multiple biomass resources. Renewable RenPowerTM is expected to qualify under the Renewable Portfolio Standard (RPS), Feed-in-Tariff (FIT) and Renewable Obligation programs and can help regions reduce their dependency on fossil-derived electricity.

Offtake partners 
Contract for RenDiesel for ground equipment at LAX: Rentech signed a multi-year agreement to supply eight airlines with up to 1.5 million gallons per year of renewable synthetic diesel (RenDiesel) for ground service equipment operations at Los Angeles International Airport (LAX). The RenDiesel will be produced at the proposed renewable fuels project in California.

The initial purchasers under the agreement with Aircraft Service International Group (ASIG), the entity that provides fueling services to many airlines that operate at LAX, are Alaska Airlines, American Airlines, Continental Airlines, Delta Air Lines, Southwest Airlines, United Airlines, UPS Airlines and US Airways. Additional airline purchasers of RenDiesel can be added under the agreement with ASIG. The agreement is the first of its kind to supply renewable synthetic fuels to multiple domestic airlines.

MOU with thirteen airlines for RenJet: Rentech signed a Memorandum of Understanding with thirteen domestic and international passenger and cargo carriers that is intended to serve as a framework for a future definitive supply agreement for certified jet fuel from Rentech’s proposed synthetic fuels and power facility in Adams County, Mississippi (Natchez Project).

The non-binding MOU signed by Rentech and Air Canada, AirTran Airways, American Airlines, Atlas Air, Delta Air Lines, FedEx Express, JetBlue Airways, Lufthansa German Airlines, Mexicana Airlines, Polar Air Cargo, United Airlines, UPS Airlines and US Airways includes terms that are anticipated to serve as the basis of a possible definitive purchase agreement by these carriers for the Natchez Project’s entire synthetic jet fuel production of approximately 250 million gallons per year.

Executed Power Purchase Agreement (PPA) for RenPowerTM: Rentech has a long term PPA in place with Progress Energy Florida for approximately 90% of the electric power produced from our proposed Port St. Joe Project. The project is designed to produce 55MW of power, which is enough to power 50,000 homes.

Past Milestones

In May of 2011, Rentech was selected to receive 1.1 million cubic meters/ year of primarily wood waste and unmerchantable wood fiber to produce renewable certified low-carbon jet fuel from its proposed Olympiad Renewable Energy Center. The proposed wood allocation is the largest ever awarded in the Provincial Wood Supply Competitive Process administered by the Ontario Ministry of Northern Development, Mines and Forestry. The process was highly competitive with over 100 applicants vying for the allocation. The project is being designed to produce 23 million gallons annually of renewable low-carbon jet fuel and 13 million gallons annually of renewable naphtha. Beyond support for the project at the Provincial level, Rentech’s proposed Olympiad Project is supported at the Canadian federal level, with potential project funding of up to C$200 million from SDTC and from the local Aboriginal group, with up to an 18 percent equity investment in the project from Pic River First Nation.

In July of 2009, Rentech acquired SilvaGas Corporation which is a patented gasification technology which produced syngas from a wide variety of biomass feedstocks. The technology has over $100 million in funding from private investors and the US Department of Energy (DOE) and has operated successfully at commercial scale in Burlington, VT. Over the last couple of years the Rentech-SilvaGas technology has been refined and has been incorporated into our proposed Port St. Joe Renewable Energy Center in Port St. Joe, Florida. We have received our final air permit for the project from the Florida Department of Environmental Protection which is one of the final steps necessary to begin construction of the world’s first Biomass Integrated Gasification Combined Cycle (BIGCC) using the Rentech-SilvaGas biomass gasification. We have entered into Term Sheets for the majority of the projects feedstock requirements and finalizing the EPC contract price.

Rentech recently acquired 95% ownership of ClearFuels, bolstering its suite of technologies. By the end of calendar year 2011, the Rentech-ClearFuels Gasifier will be mechanically complete and producing fuels at our PDU facility in Commerce City, CO. The project received $23 million from the DOE to construct the biomass gasifier and integrate it with the Rentech Process. The project will demonstrate a flexible and versatile thermochemical process that coverts mixed biomass feedstocks to a clean controllable syngas for the production of liquid hydrocarbon fuels. The process has the flexibility to convert multiple low-cost cellulosic byproducts and waste products resulting in no land use changes or added collection or transportation emissions.

Future Milestones
Biomass gasification projects: Rentech will be actively working on small scale projects which would allow us to self-fund the commercial deployment of our gasification technologies in projects that could provide a relatively short payback period. Rentech also intends to partner with large companies with existing operational sites with waste streams that can be used as feedstock for our gasifier.

Continued Development of projects (Olympiad Project and Port St. Joe):
Olympiad Renewable Jet Fuel Project in Canada: intend to complete Front End Engineering and Design (FEED); secure a source of funding with the Sustainable Development Technology Canada (SDTC); secure an off-take customer for the renewable jet fuel and partner with Pic River First Nations to create job opportunities for the Aboriginal community decimated by the struggling forestry sector. We also intend have a firm off-take agreement with a large commercial airline company.

Port St. Joe Renewable Power Project in Florida: Rentech expects to receive the last remaining permit required for construction; finalize feedstock agreements; finalize the EPC contract price; secure financing; and construct and commission of the facility.

Continued enhancement of our technology portfolio to maintain energy conversion technology leadership. This includes enhancing, developing and acquiring technologies to target broader markets, lower our risk, capital cost and improve unit economics. They will look to acquire energy business that have existing operating facilities with cash flows and alternative energy technologies and have existing facilities which we can add our technology to.

Business Model:
Rentech’s business model encompasses being:
• a developer/owner/operator of synthetic fuels and power facilities (particularly renewable energy facilities)
• a developer of synthetic fuels and power facilities
• a licensor of energy conversion technologies of biomass gasification and/or Fischer-Tropsch for the production of synthetic fuels and power facilities from renewable and fossil resources as well as a licensor of biomass gasification technology for repowering coal-fired power plants for production of renewable electricity.

Competitive edge:

Rentech has several competitive advantages:

• Integrated biomass-to-fuels technologies ready for commercial deployment.
• Technology leadership.
• Demonstration stage completed.
• Operational experience.
• Project pipeline.
• Strong balance sheet.

Distribution, Research, Marketing or Production Partnerships or Alliances.

Denbury Resources, Inc. (“Denbury”).

UOP.

Fluor Corporation (“Fluor”).

Jacobs Engineering Group, Inc (“Jacobs”).

Aircraft Service International Group (“ASIG”).

US Air Force.

United Airlines.

Audi.

Norfolk Southern and Walker Caterpillar.

Pall Corporation.

Mann Turbo & Diesel.

Hitachi Zosen Corporation. Province of Ontario, Canada:

The province of Ontario.

Stage (Bench, pilot, demonstration, commercial)

1. Rentech-SilvaGas biomass gasification technology operated at a commercial
scale of 400 tons per day.
2. The Product Demonstration Unit is a demonstration scale plant that produces 10 barrels per day of synthetic jet and diesel fuel. It is the only operating integrated synthetic fuels plant operating in the U.S. today. Our Rentech-ClearFuels gasifier will be mechanically complete and demonstrated by the end of the year at our PDU facility.
3. The Port St. Joe Renewable Energy Center, currently under development, is a
commercial scale plant that is expected to generate sufficient economic returns for investors, and will employ both our Rentech-SilvaGas biomass gasification technology to produce 55MW of renewable power.

During our nearly 30-year history, Rentech and our licensees have successfully applied the Rentech Process in facilities ranging in size from pilot scale to 300 barrels per day of synthetic fuels and chemicals production. Our first renewable facility was built in 1992 and used landfill gas to produce alternative fuels. Rentech’s technologies have been chosen for demonstration at DOE sponsored facilities; the Rentech Process at DOE’s Laporte, TX facility and the Rentech-SilvaGas gasification process at the McNeil power station in Burlington, VT.

Company website

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