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Partnership agreements pay way for construction start

Ethanol plant on target for $140 million investment

by Andrew Henderson

Fulton, NY Front Page
October 16, 2004

Partnership agreements pay way for construction start - Ethanol plant on target for $140 million investment

Northeast Biofuels, the company looking to build one of the nationÕs largest ethanol-production plants in the Town of Volney, announced last week that it has finalized partner-supplier agreements with Perdue Farms and BOC Gases.

In addition, officials reported that the environmental permitting process is now complete, paving the way for construction of the $140 million plant, which would have the capacity to produce more than 100 million gallons of ethanol per year.

Construction at the former Miller Brewing facility is expected to begin by the end of the year. It is anticipated that the plant will be fully operational in early 2006 and would be the first ethanol plant in the northeast.

Ethanol is a product that is added to gasoline to increase its oxygenate characteristics and octane levels. Ethanol is a requirement for all gasoline sold in New York State since it has outlawed methyl tertiary butyl ether, a toxic chemical used as an oxygenate to enhance the cleaner burning of the fuel.

"Over the past several months, NEB has made enormous progress securing its environmental permits and finalizing with key partner-suppliers such as Perdue Farms and BOC Gases," said Northeast Biofuels President Eric Will. "The permits and agreements, coupled with the stepped-up state and national focus on alternative energy and renewable resources have positioned Northeast Biofuels perfectly."

Northeast Biofuels and Perdue Farms, based in Salisbury, Md., reached an agreement where Perdue would be taking full responsibility for purchasing, transporting, and storing Northeast BiofuelsÕ corn requirements. Perdue plans to provide Northeast Biofuels with 41 million bushels of corn annually.

In addition to outsourcing the corn, Perdue, most known for its poultry products, will locate its northeast headquarters for its grains origination and animal feed distribution division at the Riverview Business Park, the site of the proposed ethanol plant.

One of the products Perdue will market as a nutritional supplement for dairy and other livestock will be distillerÕs dried grains, a co-product of the ethanol manufacturing process.

BOC Gases and Northeast Biofuels reached a contract for BOC Gases to purchase carbon dioxide that is produced during the production of ethanol. BOC Gases is the worldÕs largest marketer of industrial gases and the largest marketer of carbon dioxide in the northeast. The company plans to construct a $14 million carbon-dioxide liquefaction plant adjacent to the proposed ethanol plant.

When it reaches full capacity of 100 million gallons of ethanol per year, Northeast Biofuels will produce the largest carbon dioxide stream in the northeast.

"When we go into full production, there will be at least 100 direct jobs at NEB, Perdue, and BOC Gases, while another 300 will be employed during the 15-month construction and renovation cycle," said Will. "In addition, the experts tell us that at least 1,000 spin-off jobs will be created in the agriculture and transportation sectors."

Will noted that Northeast Biofuels, Perdue, and BOC Gases will provide a foundation for further development of the 420-acre business park into one of the nationÕs largest agri-business complexes.

In addition to the two companies, Northeast Biofuels reached partner-supplier agreements with Lurgi PSI, Inc. of Memphis, Tenn., engineering, design, and EPC contractor; RenerGlobe, Inc. of Toronto, plant operations; Noble Americas Corp. of Stamford, Conn., ethanol purchasing; CSX Railroad of Jacksonville, Fla., transport of corn and finished products; and Jefferies & Company, Inc. of New York City, investment banking and financial services.

The project has received the support of Congressman John McHugh, Senator Jim Wright, Assemblyman Will Barclay, Operation Oswego County, and the Metropolitan Development Association as well as some Oswego County labor unions, including I.B.E.W. Local 43 and the Plumbers & Steamfitters Local 73.

The project has also received support from the SUNY College of Environmental Science and Forestry and the SUNY Center for Sustainable and Renewable Energy.

The college has committed to purchase the first 500 gallons of ethanol produced by Northeast Biofuels to help meet the liquid fuel demands on its campus.

"We are very encouraged by the support the project continues to receive from the local, state, and federal governments," Will said. "Northeast Biofuels, with its close ties to research at the Syracuse Center of Excellence, will reinforce New York?s leadership in advancing renewable resources as an alternative to foreign oil."

The proposed ethanol plant received a boost when Lion Capital Management Group, the parent company of New York Chocolate and Confections Company, acquired the Fulton co-generation plant from El Paso Merchant Energy North America Company. The co-generation plant is a 45-megawatt, natural gas-fired, combined-cycle power plant facility located in Fulton. The plant is specialized in producing electricity and steam for industrial use.

Lion Capital Management Group and Northeast Biofuels have discussed interest in working with the Fulton Co-generation Association to provide steam to the ethanol-production facility being proposed for the Riverview Business Park and a portion of the former Miller Brewing plant. The venture would allow Northeast Biofuels to reduce the cost of its energy that it forecasts for the ethanol project.

In a letter to Lion Capital Management, Northeast Biofuels Chief Financial Officer J. Michael Hadley wrote, "We have a very high level interest in pursuing the potential of entering into a mutually agreeable business arrangement with your organization for its supply of steam and power to our ethanol project.

Copyright©2004 Valley News

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