Gevo signs offtake agreement with Mansfield Oil Co.
Englewood, Colo.-based biobased isobutanol developer Gevo Inc. has signed a commercial offtake and strategic marketing alliance with downstream oil company Mansfield Oil Co. to distribute its isobutanol fuel into the petroleum market.
According to a statement by Gevo, its agreement with Mansfield Oil has three main pillars: the first two are part of a five-year contract that allows Mansfield Oil to blend Gevo’s isobutanol for its own use and to be a distributor of Gevo’s isobutanol. The last pillar is a three-year contract under which Mansfield Oil’s subsidiary will provide supply chain services that include logistics management, customer service support, invoicing and billing services. Mansfield markets and distributes fuel to thousands of commercial customers across all 50 states and has more than 900 supply points across the country.
“We are impressed by Gevo’s unique approach to isobutanol development and are confident they will remain the industry leader and a key partner for us,” said Doug Haugh, executive vice president of Mansfield Oil. “Through this partnership, we are working to develop new fuels formulated with renewable isobutanol that expand the renewable content of the fuels we supply. This also addresses the performance requirements seen in the recreation and marina markets that we supply today.”
The definitive commercial agreement with Mansfield Oil is Gevo’s second in September, further expanding the company’s reach in both the fuels and industrial chemicals sector. Previously, Gevo signed an offtake agreement with Sasol Chemical Industries Ltd. for its isobutanol to be sold as a chemical intermediate in consumer goods such as paints, ink and coating applications.
“Entering into our second commercial offtake agreement is an exciting milestone for us,” said Christopher Ryan, president and chief operating officer of Gevo. “Mansfield is an outstanding partner to help us both market and distribute our advanced biofuel product into a complex petroleum market. They will help us manage the supply chain and logistics required to efficiently move our product to market.”
Gevo’s business is focused on converting existing ethanol plants into biorefineries that can also produce isobutanol. Currently, the company is retrofitting a 22 MMgy corn-ethanol plant in Luverne, Minn., and a 50 MMgy in South Dakota. While the South Dakota facility is only the second plant that Gevo has partnered with, the company said by 2013, 110 MMgy of isobutanol capacity will be online. Both facilities will account for about 60 MMgy of combined isobutanol production capacity.