Sundrop Fuels Inc., a gasification-based biofuels company backed by Chesapeake Energy Corp., announced that it is buying about 1,200 acres of land in Louisiana to build its first production facility. The inaugural plant, using sustainable forest waste combined with hydrogen from natural gas, will produce up to 50 million gallons a year of what the company claims would be the world’s first “ready-to-use, renewable green gasoline.”

The facility, to be sited in Rapides Parish, LA, near Alexandria, is to cost $450-500 million to build, financed in part through the sale of tax-exempt private activity bonds. The bonds would not require any financial obligation from state or local authorities, Sundrop noted. Louisiana provided Sundrop with performance-based incentives for the facility, which is expected to employ about 150 people.

“Our decision to locate in Rapides Parish underscores Louisiana’s commitment to the advanced biofuels industry, and we look forward to our partnership in helping meet the nation’s growing demand for renewable, domestically produced transportation fuel,” said CEO Wayne Simmons.

Sundrop, which was founded in 2008, claims that its drop-in advanced biofuel once manufactured would cost “as much or less than petroleum-based transportation fuels.” The gasification process involves converting cellulosic feedstock into synthesis gas, which then is made into bio-based “green gasoline” that could be used in combustion engines.

Chesapeake, the largest gas producer in northern Louisiana’s Haynesville Shale, invested $155 million in Sundrop last summer as part of the producer’s campaign to use U.S. gas supplies to transform the domestic transportation fuels market (see Daily GPI, July 12). Chesapeake at that time set up a $1 billion venture capital fund to invest in companies and technologies to enable gasoline and diesel fuel to be replaced with natural gas and gas-to-liquids fuels. Other investors in Sundrop are venture capital firms Oak Investment Partners and Kleiner Perkins Caulfield & Byers.

The Louisiana facility would provide an “operational platform” to begin field integration of its proprietary radiant particle heat transfer gasification technology, according to Sundrop. The process would drive Sundrop’s future massive-scale biofuels plants, which together are projected to produce more than 200 million gallons a year of renewable, drop-in biofuels. Sundrop plans to achieve a combined production capacity of more than 1 billion gallons by 2020, which if achieved would be a significant percentage of the cellulosic advanced biofuels goal set by the nation’s renewable fuels standard, said company officials.

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