US KiOR shutters cellulosic plant in hopes of optimising production

11 January 2014 00:08  [Source: ICIS news]

HOUSTON (ICIS)--KiOR has shut down its cellulosic ethanol plant in Columbus, Mississippi, to optimise operations in an effort to get production to at or near nameplate capacity, the company confirmed on Friday.

The facility was shut down on 17 December and will remain offline for the most part while the $10m optimisation project is undertaken, CEO Frank Cannon told analysts on Thursday during a conference call. KiOR provided a transcript of the call on Friday.

The project entails addressing issues with throughput, yield and overall process efficiency and reliability, the CEO said.

“We know what work needs to be done, and in 2014 we intend to execute this work in a single project,” he said. “This project encompasses a number of smaller process improvements, equipment add-ons and refinement of operating conditions in all areas of facility, that taken together, we expect will bring Columbus to design operational performance.”

The plant will only be operated in the first quarter of 2014  “to the extent we want to test and prove our optimisation projects”, Cannon said.

KiOR expects the project will position the plant to run in the second quarter with significant improvement in throughput and operability, he said.

“Assuming that we can implement these improvements on the timetable we have planned and that they work as planned, we believe that these improvements will allow [the] Columbus plant to process at or near nameplate capacity for biomass, 500 bone dry tons per day, by the end of 2014,” Cannon said.

In Q4 2013, the Columbus facility produced 385,000 gals of fuel, its highest amount for a quarter ever, Cannon said. Of that amount, 41% was gasoline, 37% diesel and 22% fuel oil.

Total fuel production at the plant for 2013 was 894,000 gals, the CEO said.

As a result of Columbus plant project and uncertainty over the 2014 Renewable Fuel Volume Obligation in the US, the company said its plans for building a second cellulosic plant at the Columbus site will focus this year only on the design of the facility while further researching and developing yield and efficiencies in the company’s current production processes.

KiOR is part of a federal class action lawsuit filed in August, alleging that the company and its officers violated US securities law and misled investors about the business and its operations. It had projected that second-quarter fuel production at the facility would be 300,000-500,000 gal, but later, it announced production reached only 75,000 gal.

By: Jeremy Pafford
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