BP inks offtake deal for UK biodiesel

By Ron Kotrba | March 23, 2010
Posted March 30, 2010

Four Rivers BioFuels Ltd., a subsidiary of Four Rivers BioEnergy Inc., signed an offtake agreement with BP Oil International Ltd. for the sale of at least 60,000 metric tons (approximately 18 million gallons) per year of on-spec biodiesel. The initial term of the agreement is five years.

The contract will go into effect once Four Rivers BioFuels Ltd., located in the northeastern English town of Blyth, can reach the minimum production volume to fulfill delivery requirements of the contract.

Gary Hudson, CEO of Four Rivers BioEnergy, told Biodiesel Magazine that the facility was originally built years ago as one of the world's largest penicillin factories but was eventually forced to shut down due to more efficient competition from China. Subsequently the plant was purchased by a group that repurposed it to produce biodiesel, after which Four Rivers BioEnergy bought the facility.

In April 2009, Four Rivers BioFuels was producing on-spec fuel for its new owners but Hudson and crew decided to shut down production only months later to make design and engineering modifications, including a more robust and effective front-end treatment system. Hudson said the plant's primary feedstock is used cooking oils.

With current production capacity at 77,000 tons per year, Four Rivers BioFuels stated that it intends to expand to 100,000 tons in the next seven months, and up to 200,000 tons within three years. Developing its own port and storage facilities in the nearby seep sea port in Blyth is part of Four Rivers BioFuels' strategy.

The company is seeking financing for the working capital necessary for plant expansion. Also, feedstock supply agreements are still being negotiated. Acquiring financing and feedstock supply are prerequisites for meeting the terms of the offtake agreement with BP.
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