ABF, BP, DuPont in ￡200m UK biofuel JV

26 June 2007 08:30  [Source: ICIS news]

SINGAPORE (ICIS news)--Food, ingredients and retail group Associated British Foods (ABF) said on Tuesday that it plans to form a joint venture with energy giant BP and chemicals major DuPont to build a large biofuel plant in the UK.

ABF and BP will each hold 45% of the joint venture and DuPont will hold the remaining 10%.

The plant will have capacity of 420m litres/year, or 330,000 tonnes/year, producing bioethanol from wheat and will be built at a cost of £200m ($400m/€$298.5m) at BP’s chemicals site at Saltend, Hull.

It is expected to come on stream in late 2009 and ABF expects a return on the investment ahead of its cost of capital in the first full year of operations.

The plant will initially produce bioethanol, but the partners will look at the feasibility of converting it to biobutanol once the technology is available, ABF said.

To this end, BP and DuPont plan to build a jointly-funded biobutanol demonstration plant which will run in parallel with the main plant.

It is expected that formal agreements will be entered into by the joint venture, after its formation, with other ABF businesses Frontier Agriculture and AB Agri.

The supply of locally-grown wheat would be arranged by Frontier, a UK-based grain marketer and supplier of agricultural inputs.

The major co-product of bioethanol production, distillers’ grain, would be sold to AB Agri, which will market the distillers’ grain as an alternative feed for livestock.

This announcement follows British Sugar’s plan to build the UK’s first bioethanol plant at Wissington, Norfolk. Its capacity will be 70m litres/year or 55,000 tonnes/year of bioethanol, using sugar beet as a feedstock.

The plant will start production in July.

The European Investment Bank is finalising its approval for the provision of £120m of project financing for both of ABF’s biofuel investments, ABF said.

($1 = £0.50/€1 = £0.67)

By: Jeanne Lim
+65 6780 4359

< previous article(VIDEO - ICIS news Asia Lunchtime Bulletin 16 October 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly