It looks as though
Frontier Renewable Resources won't be the only company striving to build the world first commercial-scale, wood-based cellulosic ethanol biorefinery.
Frontier announced that it has signed a non-binding letter of intent to support the construction of the facility with its parent-company
Mascoma Corp. and
Valero Energy Corp. The facility is expected to begin construction later this year in Kinross.
According to the letter of intent, Valero has the option of investing up to $50 million of the equity required to finance the project and would enter into an off-take agreement for the project's ethanol production.
The inclusion of Valero, the nation's largest independent oil refiner, adds a boost to the financing package for the biorefinery.
"Valero's proposed investment in our first commercial-scale production facility proves the economic practicality of Mascoma's technology for the conversion of woody biomass into ethanol," says Bill Brady, CEO of Mascoma. "We are also thrilled to have Valero as a shareholder in Mascoma Corp. as there are many synergies even beyond the Kinross facility, where the technologies we have developed could be helpful to Valero's business."
The biorefinery is expected to have an annual production of 40 million gallons of low-carbon cellulosic ethanol. To make the fuel, Frontier will use pulpwood from the Upper Peninsula.
Writer: Sam Eggleston
Source: Bill Brady, Mascoma
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