GPRE expands blending capability with 96-car unit train terminal

By Holly Jessen | November 14, 2011

BlendStar LLC, a wholly owned company of Green Plains Renewable Energy Inc., is adding a tenth biofuels terminal location -- its second terminal in Birmingham, Ala. BlendStar operates blending terminals for ethanol and/or biodiesel in a seven-state region of the southeast United States, handling about 495 MMgy.

Unlike the other terminal locations, which have 31 or less rail car spots, the new terminal has the ability to receive a full 96-car unit train of ethanol, which can be offloaded within 24 hours, said Jim Stark, vice president of investor and media relations for GPRE. That’s unique. “Some don’t have that ability,” he told EPM, adding that it will also have 160,000 barrels of storage plus four truck lanes with the ability to expand to five in the future.

The new terminal will be built right on Burlington Northern Santa Fe Railway property. BlendStar has signed a long-term lease with BNSF, Stark said. The existing terminal in Birmingham will be retrofitted to handle other biofuels and liquid products once construction of the other facility is complete, expected in the third quarter of 2012. “The ethanol would be switched over to primarily go through this new terminal,” he says.

GPRE ethanol plants as well as BlendStar customers, which could include other ethanol companies, will benefit from the new terminal. Ethanol delivered to the new terminal is pulled right off unit trains via a fully automated rail unloading system and dispersed to truck traffic, Stark said. The facility will have the initial capability of distributing about 385,000 barrels of ethanol every month.

"We believe Birmingham is a significant growth market, and development of this unit train terminal is a part of our ongoing effort to expand and diversify our business platform along the value chain," said Todd Becker, GPRE’s president and CEO. "With superior services provided by BNSF Railway and BlendStar, operation of this new terminal will provide better transportation economics to shippers, as it will be the eastern most point for direct ship on the railroad to receive ethanol from the Midwest. This will result in improved ethanol distribution through one of the most modern and efficient ethanol terminals in the U.S. when it is completed."

Looking at areas of ethanol demand, the markets on the East Coast and California are well served. However, BlendStar saw a need in the south and southeast regions of the U.S. The company’s goal has been to expand in areas that are “flying below the radar” of larger blending companies. “We have felt it was a good foothold to put these small niche terminals in these areas to increase the amount of ethanol or biofuels being blended in the southeast,” Stark said. “We have seen pretty good results for the region.”

For example, he mentioned the 120 MMgy GPRE ethanol plant located in Obion, Tenn. The company has been transporting ethanol from that facility to its terminal in Collins, Miss. “We’ve seen a good increase of ethanol usage there, as we’ve opened that facility,” he said.