Genesis Energy interested in biomass energy project

By Erin Voegele
Web exclusive posted March 19, 2009, at 5:48 p.m. CST

Hong Kong-based oil and gas company Genesis Energy Holdings Ltd. recently entered into a memorandum of understanding with China Grand Forestry Green Resources Group Ltd. regarding a possible joint investment in a 30-megawatt biomass to energy project in the Hubei Province of China. According to a press release issued by Genesis Energy, the project is currently wholly owned by China Grand Forestry.

The project was jointly developed by China Grand Forestry and the Zaoyang Municipal Government with an aim to utilize residual forest biomass to generate clean and renewable energy. While forest residues will be the facility's primary feedstock, Genesis Energy spokeswoman Jenny Lee said agricultural biomass serves as an auxiliary feedstock.

According to Lee, no projected timeline for project development is currently available. "This possible project is subject to further negotiation between the two parties and satisfactory results of the related due diligence," she said. "The company is therefore currently not in a position to comment on the particulars of the project."

"The Chinese government has placed the development of new energy as its priority for this year as the nation seeks to ease its energy shortage problem while upholding its pledge for sustainability," said Terence S. T. Kong, Genesis Energy's chairman. "At present, coal accounts for two-thirds of China's energy consumption, whereas new energy contributes no more than 5 percent of the total, indicating a huge potential to be tapped while the country gradually removes its reliance on coal."

According to information supplied by Genesis Energy, the group currently operates oil and gas business in Utah, Colorado, New Mexico, Utah, Arizona; as well as in Xun Yi and Ganquan County in Shaanxi, China. The group also recently announced it will hold investments in the operation of waste incineration projects for electricity generation in Shanxi.

"It is a natural progression of the company to move into the biomass sector to gain further foothold in green energy," Lee said. "The strong demand for energy in China has created an excellent backdrop for the development of green, clean and renewable energy. The Chinese government has also issued policies to support the establishment of energy source forests. The company considers the possible biomass investment a good opportunity to further expand its business into biomass to energy."

The utilization of waste materials for energy is an environmentally friendly approach to the waste disposal problem and in providing another source of electricity, Lee continued. "It is expected that the Chinese government will further encourage green electricity production in the future with the introduction of more favorable policies," she said. "We expect the waste to energy business to provide a stable source of income to the company in the medium term."