UOP’s Ecofining tech linked to massive renewable diesel project in Ohio

August 4, 2014 |

south-pointWill the old Buckeye Ethanol site in South Point, Ohio be transformed into an ultra-modern base for renewable diesel and jet fuel blendstocks?

That’s the vision for a new project origination team that is talking about 1.2B gallons of capacity. Possible? The Digest investigates.

From Ohio, word has been going around this week of a 120 million gallon renewable diesel and jet fuel project that’s been announced for South Point, in Lawrence County in the southeastern part of the Buckeye State. Scheduled for completion in 2017.

One slight mystery from the story that first appeared on PR Newswire was the nature of the technology – was it proprietary, or based on an existing system such as the Dynamic Fuels or Honeywell UOP technology?

The Digest has learned that the massive project proposes to utilize Honeywell UOP technology.

Ecofining technology on a hot streak

Ecofining-3x2-300x200It’s the 4th commercial-scale project in the news this year based on Honeywell UOP/Eni Ecofining technology. A massive $800 million aviation jet fuel project developed by Petrixo for the Emirates was announced last month, and the 133 million gallon Diamond Green Diesel project (a JV of Darling International and Valero) is already completed and started operations in mid-May.

Commercial scale production of Green Diesel started in April 2014 in the ENI biorefinery located in Venice, Italy — which will supply fuel to the Italian fleet, among other customers.

But the project may end up having more in common with Emerald Biofuels — an 85 million project announced for Louisiana in 2012, and which picked up Defense Department support last year via a small project development grant — and which is also based on the Ecofining technology. The two projects — this one by SG Preston and that one by Emerald — are the first two we have publicly announced which are being developed by entrepreneurs rather than established major players in refining, such as Eni, Petrixo or Valero.

SG Preston doesn’t have any completed projects to its credit — though it made a run at developing a renewable powergen project in the past two years — and CEO LeTang is tight-lipped about the financial backers and offtakers.

LeTang said that Southeastern Ohio was targeted because of its existing infrastructure — the site was formerly home to the failed Buckeye Ethanol project. In choosing Econfining as the technology, LeTang noted that “we were only interested in a proven turn-key technology; there are a lot of good technologies out there, but most of them are too experimental for our business model.”

The company will utilize waste fats, oils and greases as well as distiller’s corn oil obtained from ethanol plants — but said that they will not publicly outline their feedstock strategy in depth until at least Q4 of this year.

Commercially viable without RINs or other renewable incentives

The project as designed, LeTang said, did not require RINs to be economically viable — or other renewable fuel incentives. “If there are incentives that reward us for building capacity, that’s fantastic and we’ll take them,” he said, but stressed that they were a sweetener of returns rather than required for the project economics to work.

LeTang said that the company is “in discussions” with offtakers, noting that he expected that the fuel would be positioned as a premium additive blendstock.

“This is not going to be some typical biofuels project where there is a fuel produced for, say, $5.00 a gallon, pegged to the crude oil price, and the offtaker gets the RIN and hopefully nets out something close to the competitive market price for the fuel it replaces.

“For example,” he said, “we are targeting companies that are looking for a premium blendstock so that they can cost average with lower-end fuels yet still meet fuel specifications. For our model, the fuel not only has to be renewable, it has to be additive, and improves the end product. Take for example fuel blends where kerosene is added to fuels to alter their cold-flow properties — but it costs more and dilutes the energy content.”

Overall, SG Preston is chatting about big capacity numbers — LeTang said that the initial project is “part of a larger vision of partnering with leading, global refining technology partners and local communities to develop a portfolio of renewable diesel and renewable jet fuel refineries targeting 1.2 billion gallons per year, or 20% of the federal RFS2 biomass-based mandate for biofuels.”

Regional development partners

Other partners in the project include the Lawrence County Economic Development Council, which is investing 62 acres in land and other incentives. The Appalachian Partnership for Economic Growth and JobsOhio were also instrumental, according to the developers, “in securing the investment and technology to play a role in the future of southern Ohio.”

“This project will be of significant economic importance to southern Ohio, bringing long-term employment and income to the region,” said Bill Dingus, executive director of Lawrence County Economic Development Council. “We look forward to supporting the development of new energy technologies, and passing on the benefits of commerce and cleaner air to local residents.”

The Bottom Line

We’re in “wait and see” mode at this stage on projects brought forward by entrepreneurs in these financing conditions — but it definitely has a unique focus in competing with higher-cost fuel additives rather than finished fuels.

We’re tempted to rename the UOP/Eni technology “Econfining” instead of “Ecofining” because it is proving to be the turn-key design and project economics that are driving this technology forward with a big clutch of project “wins” this year.

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