GreenHunter Biofuels resumes operations

By Anna Austin | November 13, 2008
Web exclusive posted Dec. 1, 2008 at 4:55 p.m. CST

GreenHunter Biofuels LLC, a wholly owned subsidiary of Grapevine, Texas-based GreenHunter Energy Inc., announced Nov. 25 that its 105 MMgy biodiesel production facility in Houston has recommenced operations after being shut down for more than two months to assess and repair damage caused by Hurricane Ike.

Although GreenHunter had anticipated the damage would be caused primarily from high winds, it reported that the majority of the facility's damage was caused by floodwaters. The company's offices, piping between reagent tanks, and some small and intermediate tank foundations sustained damage. As well, GreenHunter said it lost just under 50 barrels of canola oil.

In August, the company had reported reaching 50 percent of its nameplate capacity; and 65 percent of its capacity just prior to Hurricane Ike shutting down the plant in mid-September. (Read Biodiesel Magazine's story, "Hurricane Ike damages GreenHunter facility.")

GreenHunter said it has utilized its existing working capital to fund the cost of the repairs completed to date, prior to receiving any of the significant amounts presently due from the company's various existing insurance carriers.

GreenHunter Senior Vice President of Engineering and Technology Bruce Baughman said the approximate 12 feet of floodwater from Hurricane Ike took out a significant amount of electrical equipment and instruments as well as control devices which have now been replaced and repaired over the last eight weeks. "In the same period, we have repaired process piping, pumps, intermediate tanks and bulk storage tanks that were damaged by flood waters," Baughman said.

Baughman added that prior to Hurricane Ike, GreenHunter Biofuels was systematically ramping up processing rates. "While it is our intent to again engage in a similar ramp up of continuous throughput rate, it is reasonable to anticipate some troubleshooting during our second start-up phase due to the magnitude of the repairs that were necessary to recover from Hurricane Ike," he said.

GreenHunter anticipates achieving 50 percent of capacity within the next four operating weeks.

The company also expects to continue to use 100 percent animal fats as its primary feedstock, although the facility is multi-feedstock capable. "Even though we have experienced a dramatic decline in the price of our finished product, producing biodiesel from animal fats continues to make economic sense and is a financially viable business," said Gary Evans, president and chief executive officer of GreenHunter Energy. "We are confident that with our lower cost, higher quality production approach, we will be able to produce biodiesel profitably for our shareholders."
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