Tellurian, Golden State Foods open terminal

By Kris Bevill | September 16, 2008
Web exclusive posted Sept. 17, 2008 at 11:49 a.m. CST

Los Angeles-based Tellurian Biodiesel Inc., a marketer and distributor of biodiesel, has announced plans to open a biodiesel distribution terminal in late September near downtown Los Angeles. The project is a collaborative effort between Tellurian and Golden State Foods, a nationwide fast-food supply company.

Earlier this year, Tellurian and Golden State Foods partnered to form Encore BioRenewables, a biodiesel production company that will convert waste cooking oil acquired from Golden State Foods customers, including McDonald's and Starbucks, into high-quality biodiesel. The plant, once operational, will supply some of the biodiesel to the L.A. terminal. (See to read Biodiesel Magazine's story about the partnership.)

"This new joint venture will represent the first concrete step forward in our shared plans to manufacture and distribute sustainable biodiesel nationwide," said Mike Geisler, general manager of Golden State Food's strategic sourcing alliance division. "Our collaboration with Tellurian Biodiesel has been a gratifying success."

Joe Gershen, vice president of sales and marketing at Tellurian, said the terminal will have a low-key opening, adding that due to market turmoil there is uncertainty as to how much biodiesel will be processed through the terminal. How long the market will be unstable no one knows, but Gershen is confident that things will improve in the future. "That's what we're trying to figure out now," he said. "Will the biodiesel tax credit be renewed at the end of this year? That will matter. The market is in turmoil everywhere right now, but many customers remain committed to high-quality biodiesel."

Financing is an issue at the top of most biodiesel producer's lists and Gershen said Tellurian finances projects "carefully and conservatively." The company employs a "crawl before you walk before you run" strategy, he said. "We're not bringing in a lot of inventory right now [to the terminal] because it doesn't make sense."

Tellurian is opening the terminal as it looks toward the long-term outlook for biodiesel and realizes it will be a tough start for the terminal. According to Gershen, they will continue to focus on providing high-quality biodiesel to their customers and believe that by doing so they will help to continue to expand the market for their product.

Tellurian's terminal will be supplied by several producers from various parts of the country. The companies are working toward using only California biodiesel, but quality is the number one priority for Tellurian, said Gershen, so for the time being a portion of biodiesel will be brought in from out-of-state. A variety of feedstocks are being used by Tellurian's suppliers, including animal fats, recycled materials and soy oil. All suppliers are BQ-9000 certified, which is of utmost importance to Tellurian's operating principle. Gershen said they are in the process of getting the terminal BQ-9000 certified and should have that completed within six months.
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