Aemetis adds CO2 liquefaction plant

31 October 2014

News arrives from Aemetis, via its latest SEC filings, that the company has “entered into an agreement with Denmark-based Union Engineering to design and construct a 300 ton per day capacity (approximately 220 million pounds per year) liquified carbon dioxide facility.”

In our Bioenergy Project of the Future series, if you’ll recall, we reported that industry has identified CO2 as a key target for monetization and for further improving the performance of biofuels relative to baseline gasoline.

So, let’s look at how a CO2 plant can change the economics and performance.

The addition of CO2 liquefaction

The facility will liquify the CO2 produced at the Aemetis ethanol biorefinery in Keyes, California at an expected construction cost of approximately $15 million.

The additional operating cost of the Liquid CO2 facility will be primarily comprised of electrical power consumption. The Company plans to sell the liquefied carbon dioxide to end users and distributors primarily in the Central Valley of California. Design and engineering work has begun, and liquid CO2 production is expected to begin in the fourth quarter of 2015.

The Keyes ethanol plant already uses a dual-pass wet scrubber to produce 99.9% pure CO2, and the compression process does not have significant yield loss. The process uses a “screw” design that compresses at a 750:1 gas:liquid ratio.

The going rate for CO2

Right now, the end user price of pure CO2 is about 8 cents per pound ($160 per ton). The Keyes plant would likely about 180,000 tons of CO2 per year, with peaks and valleys in CO2 production level based upon the fermentation cycle, and the CO2 plant would convert 110,000 tons (the consistent, base production level from fermentation) into liquid CO2.

Now, the company is likely to have a blend of wholesale and retail distribution — so think in terms of 80% of theoretical revenues to allow for the middleman, or around $128 per ton. That’s roughly $14 million.

The costs and margins

Roughly $3 million for power and maintenance, leaving around $11 million of new cash flow.  So, think payback of the capital cost in around 16 months, and 50 cents per share of new cash flow (based on roughly 20 million Aemetis shares outstanding at present).

 Source; Biofuels Digest, October 27th 2014