Biofuel company KiOR, Inc. reached an agreement last Friday with the State of Mississippi to build five commercial-scale renewable crude oil production facilities in return for a state assistance package that includes a $75 million loan.
According to the agreement, KiOR will build three of the five facilities over the next five years. By 2015, the project is expected to deliver more than 1,000 direct and indirect clean energy jobs and an estimated $500 million worth of investment. In addition to the loan, the State’s package includes assistance with infrastructure needs and workforce training.
The company plans to utilize Mississippi’s supply of woody biomass to produce commercial volumes of Re-Crude™, a crude oil that can be refined into conventional fuel products, including gasoline and diesel, and deployed in existing transportation fuels infrastructure.
KiOR says its biomass conversion process utilizes a proprietary catalyst system and a technology used in the oil refining industry. The company will initially utilize woody biomass in its process, but the technology can eventually take advantage of other feedstock such as agricultural residue or purpose grown energy crops. The process is currently demonstrated at the company’s facility located outside of Houston, which is producing up to 15 barrels of renewable crude oil per day from woodchips.
Good stuff. I recently heard a liltte nugget of wisdom: from an investor stand point, the idea is worth around 8%, developing the product is worth about 25-30% and the capital to fund it all is worth the balance. The problem that comes into play is that the person with the idea thinks these numbers should be reversed. Seek people with experience to help you get your perceptions and expectations in line with reality, the sooner the better.