Gevo reports progress at ethanol, isobutanol plant

Exciting progress is being made at Gevo Inc.’s Luverne, Minnesota, renewable fuel plant, and also within the company’s recent commercial activities, Gevo CEO Pat Gruber reported during the company’s third quarter conference call.

Highlighting Luverne plant’s side-by-side isobutanol and ethanol operation, which he said “is working well,” Gruber said installation of phase 3 of the side-by-side capital and distillation column to assist in removing water from the isobutanol has been completed.

The plant is set up to use one fermenter to produce isobutanol and three to produce ethanol.

Implementation of that project went well and equipment operates as expected, Gruber said. “The isobutanol side of the plant is working well. We have learned how to manage to contain infections. We have been pleased with the quality of the crude isobutanol coming out of the process—it’s more pure than we expected.”

The focus has now turned to improving batch size while avoiding infections, gallons per batch and turnaround time between batches to drive down production costs, according to Gruber. Good progress has been made on those fronts, he reported, with batch time turnarounds improving by nearly 50 percent compared to a few months ago. “We have also begun selling animal feed product from the isobutanol side of the plant,” he said.

The company remains on track to achieve its goal of 50,000 to 100,000 gallons per month of isobutanol production by the end of 2014, and Gruber said it is believed that the plant’s current configuration would have a capacity of 2-3 million gallons of isobutanol per year running one fermenter on isobutanol.

On the plant’s ethanol capabilities, Gruber said Gevo has been meeting its goals producing in the range of 1.5 million gallons per month, and even though ethanol prices were depressed this last quarter, the company’s ethanol sales were profitable.”Luverne has a good location to access corn and sell animal feed,” he said. “In 2015, we will have to make a decision of how much isobutanol we should produce in Luverne and determine if we should switch one or more of our fermenters over to isobutanol. This decision will be based upon the technical capability of the equipment and the potential profit margins of both ethanol and isobutanol. We of course want to maximize profitability of the site, while producing isobutanol.”

Gruber reported positive financial progress, saying that in the third quarter, the EBITDA burn at Luverne decreased by almost 70 percent, as compared to the first quarter of the year, and that the company is still looking to become break even at the plant on an EBITDA basis by the year’s end.

Gevo’s specialty fuel and specialty chemical market activity was also discussed during the call, including the company’s previously announced deal with Gulf Racing Fuels to sell isobutanol to for its new line of marine and off-road fuels, and its durability testing with the U.S. Coast Guard, the results of which are expected in a few months.