Earth Biofuels to upgrade Oklahoma facility

By Erin Voegele | February 10, 2009
Web exclusive posted Feb. 12, 2009, at 5:48 p.m. CST

Texas-based Earth Biofuels Inc. recently announced it has finalized a transaction that will provide funding for upgrades to its 10 MMgy Durant, Okla.-based biodiesel production facility and incremental working capital for the company. The transaction included the acquisition of more than 350 storage tanks, with capacities ranging from 8,000 to 39,000 gallons.

According to Randy Hepler, senior vice president of Earth Biofuels, the storage tanks were purchased from a former brewery. "They are horizontal glass-lined tanks of various sizes," he said. Approximately 30 of the tanks will be installed at the company's Durant facility with a total storage capacity of more than one million gallons. The remaining tanks will be sold to help provide funding for additional upgrades to the facility.

Hepler said the upgrades included the installation of a pretreatment process that will allow the facility to recover methanol used in the production process. In addition to soybean oil, the upgraded facility will be able to utilize beef tallow, yellow grease, and poultry fat as feedstocks. According to Hepler, these upgrades will help ensure biodiesel produced at the Durant facility meets current ASTM standards.

Due to high feedstock prices, the Durant facility, which was originally constructed in 2006, is not currently operating.

The upgrades will allow the facility to be feedstock flexible, allowing Earth Biofuels to purchase the least expensive feedstock. To overcome volatile market conditions, the company's strategy will be to utilize the additional storage capacity to acquire and hold physical inventories of feedstocks, depending upon the biodiesel economics at a given time.

The storage tanks are expected to be installed by July. Additional upgrades to the plant should be complete by August, with production beginning in September.
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