Next-generation producer plans 2nd processing plant

Source: Amanda Peterka, E&E reporter • Posted: Tuesday, October 1, 2013

One of the first companies to produce fuel from woody biomass plans to build a second facility that would double its production.

KiOR Inc. announced plans last week for a $225 million facility near its existing plant in Columbus, Miss. The company will break ground within 90 days of raising enough cash for the project. Construction is expected to take 18 months.

The new facility will produce more fuel and be more flexible at processing biomass than the original plant, which cost $150 million and produces 13 million gallons of fuel a year, company officials said.

“The Columbus II project marks an important step in the execution of the long-term business plan of KiOR,” CEO Fred Cannon said in a statement.

KiOR makes cellulosic gasoline and diesel from wood residues using a proprietary catalyst system based on one used in oil refineries. The resulting drop-in biofuels have properties identical to those of petroleum-based fuels. KiOR opened its first plant last November and begin shipping diesel in March and gasoline in June of this year.

In August, shareholders filed a class-action lawsuit against the publicly traded company for consistently missing its targets for the first facility. The lawsuit, filed in the U.S. District Court for the Southern District of Texas, accuses KiOR and its executives of deceiving investors by reporting optimistic production targets and deadlines, spurring stock purchases at prices that were artificially high (E&ENews PM, Aug. 21).

Cannon last week said that he expected construction of the second plant to progress more smoothly than construction of the first plant, since it is a duplicate of the existing facility. He also said he expected the startup timeline to be shorter for the new plant.

“We expect to incorporate our most recent technology developments into both the new Columbus II facility,” Cannon said, “and retroactively to the existing Columbus facility, thereby improving facility economics for both Columbus I and II.”

The company announced that it received a $50 million commitment for the facility from Khosla Ventures and Vinod Khosla, a venture capitalist who has previously backed next-generation biofuel companies.

Also last week, ethanol giant POET LLC said that it was on track to start operations at its first cellulosic biofuel facility early next year. The Iowa facility, a joint venture between POET and Dutch company Royal DSM, is expected to produce 20 million gallons of cellulosic ethanol each year from corn crop residues.