Renewable Energy Group is considering a number of improvements at its Geismar biorefinery after completing a previously announced $20 million acquisition of about 82 acres of land at and around the biorefinery from Lion Copolymer.
REG is considering upgrades to increase the plant’s capacity by 37 million gallons through upgrades; installing new equipment that would add 10 million gallons of capacity; and rail and water transportation projects that cut costs and boost shipments to the West Coast and other markets.
The hydrocarbon diesel biorefinery already can produce 75 million gallons of fuel a year — as well as naphtha and liquefied petroleum gas — from animal and waste fats.
Buying the 20 acres Renewable Energy had leased will mean the Ames, Iowa-based company can avoid future lease payments that would have totaled $35 million through 2033. The additional 62 acres in parcels next to and near the plant will be used to support existing production and future expansion opportunities.
Renewable Energy Group will buy roughly 82 acres of land at its Geismar biorefinery in a $20…
"Owning the land at REG Geismar saves money and provides longer-term certainty, while the additional acreage opens up a wide range of opportunities to optimize and potentially expand our proven renewable hydrocarbon diesel platform," said Daniel J. Oh, president and CEO.
Renewable Energy Group's Geismar facility began as a $160 million joint venture between Tyson Foods Inc. and Syntroleum Corp. Completed in 2010, the facility was the first large-scale biorefinery in the United States.
However, the plant shut down for maintenance in 2012 and did not resume production. Syntroleum was reluctant to invest the $10 million needed to restart the facility.
In 2014, Renewable Energy Group bought out Syntroleum and Tyson's two halves in the biorefinery. Syntroleum’s deal was valued at $40 million. Tyson's deal was worth up to $65 million.