Shell files bid to purchase Abengoa’s cellulosic ethanol plant

By Erin Voegele | October 14, 2016

Shell Oil Co. has offered a stalking horse bid of more than $26 million to purchase Abengoa Bioenergy Biomass of Kansas LLC’s 25 MMgy cellulosic ethanol plant in Hugoton, Kansas, under Chapter 11 bankruptcy proceedings.

The bid was filed with the U.S. Bankruptcy Court of the District of Kansas on Oct. 12. The stalking horse bid essentially serves as a base bid in the auction process. A hearing on the matter was scheduled to be held with the court on Oct. 14.

Court documents indicate involuntary Chapter 7 bankruptcy petitions were filed against Abenoga Bioenergy Biomass of Kansas on March 23 by several groups. The case was converted to Chapter 11 on April 8.

According to documents filed with the court, the assets included in the potential sale include the 25 MMgy cellulosic ethanol plant, a cogeneration plant, which includes a waste water treatment plant, along with approximately 400 acres of adjacent land. The documents also confirm that the plant is currently idled and not in operation.

Abengoa celebrated the grand opening of the Hugoton plant in October 2014. In December 2015, the company reportedly laid off staff at the facility, citing financial difficulties as the reason for its action.

In July, Ocean Park Advisors announced it has been retained by Abengoa Bioenergy Biomass of Kansas LLC to market its cellulosic ethanol plant in Hugoton, Kansas, under Chapter 11 bankruptcy proceedings.

The pending sale of the cellulosic plant is related to larger financial difficulties experienced by its parent company, Spain-based Abengoa, which announced plans to file for preliminary creditor protection in late 2015. 

Another Abengoa affiliate, Abengoa Bioenergy U.S. Holding LLC, recently sold several U.S.-based first-generation ethanol plants. On June 13, agreements were announced to sell four plants through a competitive process in a Chapter 11 case pending before the U.S. Bankruptcy Court of the Eastern District of Missouri. In August, that court approved the sale of five of Abenoga’s first-generation ethanol plants in the U.S.