Jan 24 2011
Mascoma interested in developing eco-friendly, low carbon level and low-cost biofuels from cellulosic biomass, declared that it has received investment from Valero Energy an independent oil-refining company.
Moreover, Mascoma and its functional subsidiary, Frontier Renewable Resources, which it jointly owned along with J.M. Longyear, a natural resource management business, and Valero, have contracted a non-binding letter of intent to build a wood-based cellulosic ethanol biorefinery. The construction of the factory is expected to commence at Kinross Charter Township, Michigan in 2011
Under the clauses of the signed LOI, Valero will invest around $50 million towards the equity needed to fund the project through Frontier Kinross an auxiliary company of Frontier and will subsequently sign an off-take accord to buy the ethanol produced from the factory. To further sustain the proposed project Valero also has agreed to offer project development and construction supervisory services. The involvement of Valero in the project has improved the funding prospects of the Kinross Biorefinery. It is expected to receive funding from the U.S. Department of Energy (DOE) and Michigan Economic Development Corporation, a funding program of the state of Michigan.
The proposed biorefinery is anticipated to produce around 40 million gallons of low carbon cellulosic ethanol every year and it will be supplied to Valero under the contracted off-take accord. The biorefinery will use the naturally reclaimed, unused and selectively harvested hardwood pulp-wood available abundantly in the milieu of the Kinross biorefinery. Mascoma has completed the process such as procuring raw materials, arrangement for pre-processing of the materials utilizing CBP process of Mascoma and the final distribution arrangements to market the cellulosic ethanol produced.