Syngest gets state funding for bio-ammonia plant

By Lisa Gibson | May 31, 2010
Posted July 1, 2010, at 1:50 p.m. CST

The Iowa Power Fund board voted July 1 to provide San Francisco-based Syngest Inc. with $2.5 million for its planned biomass-to-ammonia plant in Menlo, Iowa. The vote solidifies funding that the company has been working toward for more than a year, but the money is contingent upon $3.5 million in matching funds, which Syngest CEO Jack Oswald believes is more than achievable.

"As of today, we're off to the races," Oswald said. "This is a very important juncture. The state has put up a very big gesture." The amount is among the top five awards given by the Iowa Office of Energy Independence's Power Fund and in return, Syngest proposed to completely pay back the amount over time as it develops more facilities in the state. "We easily expect to be able to pay it all back," he said.

The bio-ammonia plant will turn 150,000 tons of corncobs into 50,000 tons of anhydrous ammonia annually, enough to fertilize 500,000 acres of land. The process involves a pressurized oxygen-blown biomass gasifier operating in an expanding bed fluidized mode. After the resulting syngas is cleaned, the carbon monoxide portion is shifted to maximize hydrogen, which is purified and catalytically reacted with nitrogen to make ammonia. Syngest has procured 75 acres for the plant, five of which will be used for the facility itself and the rest for biomass storage. The plant will require 10 percent of available corncobs within a 30- to 40-mile radius.

"As of today, the clock really starts ticking," Oswald said after the vote, adding that the plant should be operational about 30 months from now.

"I realize the risks we have in this project," Tom Wind, Power Fund board member, said during the meeting. "I think this project is worthy of support because of the early stage and potential of long-term benefit. The rewards are big and outweigh the risk. If we don't step up and do this now, I'm not sure who's going to do it and if not in Iowa, I don't know where else it should be done. I see the risk, but I think the rewards are really large, so I'm supportive of this."

The Syngest Term Sheet passed by a vote of 6-1 with some members absent, confirming Oswald's expectation that it would ultimately be approved. "It's a good fit for Iowa," he said. "There's no reason to continue using fossil fuels for nitrogen fertilizer." Had the funding been denied, the project would have proceeded, albeit more slowly and with more challenges. "It wouldn't have shut [the project] down," Oswald said of a no vote. "It would have made it a lot more difficult."

Now that the votes are in, Oswald and his team are ready to move forward quickly and begin raising more money. "This is a big milestone for us and we're thrilled," he said.