BlueFire executive stresses Fulton project is not dead

By Holly Jessen | March 08, 2013

The last and biggest hurdle to building the BlueFire Renewables cellulosic ethanol plant in Fulton, Miss., is obtaining the necessary debt financing. “What we’re still trying to do is raise the balance of financing for the plant,” Richard Klann, director of business development and marketing, told Ethanol Producer Magazine. “We’ve been in discussions about that for probably about three years now.”

Recent media attention shone a spotlight on the fact that construction is not currently active at the future site of the BlueFire Renewables Fulton LLC facility, although site work was previously completed. In response, Klann spoke to Ethanol Producer Magazine, clarifying that the company is still actively working to complete the 19 MMgy wood waste-to-cellulosic ethanol plant. “By no means is the project dead,” he said, “and … even on hold makes it sound worse than it is.”

In 2010, the company was awarded the second installment of an $88 million grant from the U.S. DOE. However, its application for a DOE loan guarantee “didn’t pan out,” Klann said, adding that the company has been searching for other types of funding. In all, BlueFire expects it will need an additional $200 million in debt and equity financing to make the plant a reality. “We have identified a couple of partners that would be there for the equity, potentially,” he said. “We’re still trying to source the debt for the project, which has been the hardest part because getting a bank to give you any money in this market has been very difficult. … We’ve been trying to go down almost any pathway that presents itself. Some are very nontraditional, some are traditional. But we are still in the process of trying to prepare the financing for this facility and it’s still at the top of our list.”

The hope is that the needed financing will be in place in the third or fourth quarter this year, enabling construction to start a few months after that. “We’re getting close with a couple financing sources,” he said. If everything goes smoothly it could take between 16 to 18 months to build the plant, Klann said, adding that the project could also take as many as 24 months to wrap up.

In the meantime, as a way to generate revenue near term, the company’s wholly owned subsidiary, SucreSource, signed an agreement with GS Caltex, a Korean petroleum company, to build a cellulose-to-sugar facility in Korea. Although he couldn’t say much about the project due to confidentially agreements, Klann did say the company had completed its portion of the work on that project. “We are actually hoping to grow that relationship to bring them in as a synergistic partner that can one day help with our financing on maybe the Fulton facility, or if not in time, maybe the next facilities,” he said.