FULTON — BlueFire Renewables Inc. has announced an off-take agreement with Tenaska BioFuels, LLC (TBF) for the purchase and sale of all ethanol produced at BlueFire’s planned cellulosic ethanol facility in Fulton in Northeast Mississippi.
“This off-take agreement is a significant step forward for BlueFire. It provides immediate revenue once our plant is on-line. Also, it will move BlueFire closer to a debt financing agreement with the Department of Energy and U.S. Department of Agriculture,” said Arnold Klann, CEO of BlueFire. “This is one of the first cellulosic ethanol contracts of its kind in the United States establishing BlueFire as a clear leader in the industry.”
Pricing of the 15-year contract follows a market-based formula structured to capture the premium allowed for cellulosic ethanol compared to corn-based ethanol, which BlueFire says gives it a credit-worthy contract to support financing of the project.
Despite the long-term nature of the contract, BlueFire said it is not precluded from the upside in the coming years as fuel prices rise.
TBF, a marketing affiliate of Tenaska, provides procurement and marketing, supply chain management, physical delivery and financial services to customers in the agriculture and energy markets, including the ethanol and biodiesel industries. In business since 1987, Tenaska is one of the largest independent power producers, according to BlueFire.
“We look forward to a long-term relationship with BlueFire and to collaborating on off-take agreements for future plants as BlueFire continues to expand and bring valuable biofuels to the markets that need it most,” said Dave Neubauer, TBF general manager and vice president.
The proposed Fulton project would allow BlueFire to use green and wood wastes available in the region as feedstock for the ethanol plant, which is designed to produce approximately 19-million gallons of ethanol per year.