Dynamic Fuels plant expected to restart in July
During a call to discuss its first quarter financial results, Syntroleum Corp. announced that Dynamic Fuels LLC’s renewable diesel plant in Geismar, La., is expected to resume operations in in July. The facility was idled in late 2012. Dynamic Fuels is a joint venture of Syntroleum and Tyson Foods Inc.
During the call, Gary Roth, president and CEO of Syntroleum, said the company ordered a new catalyst for the plant in February. It is scheduled to for delivery in late June. According to Roth, the new catalyst is expected to increase yields from an average of 80 percent to an average of 88 percent. As a result of the new catalyst, Roth said revenues per gallon would be expected increase from $4.09 to $4.55 per gallon, which would result in a $13 million revenue increase.
Rather than interrupting the feedstock chain of the plant while it is operating, Roth said the company believes it will be better to defer operations until the new catalyst is installed.
The market for renewable identification numbers (RINs) was also addressed during the call. According to Ron Stinebaugh, senior vice president for finance at Syntroleum, the company expects demand for D4 biomass-based diesel RINs to remain relatively constant for the remainder of 2013 and 2014. Stinebaugh also noted that Syntroleum currently does not expect a return to the negative margins that were experienced due to sharply falling RIN prices.
Syntroleum’s reported net income of $11 million, or $1.15 per share, for the first quarter, an improvement over a net loss of $1.9 million, or 20 cents, per share for the same period of 2012. Equity earnings of Dynamic Fuels for the quarter was $6.7 million, which includes $12.6 million in gains representing Syntroleum’s portion of the retroactive reinstatement of the $1 tax credit for 2012, partially offset by $5.9 million in losses resulting from Dynamic Fuels’ operating results from the final quarter of 2012.