Gevo says isobutanol batch times reduced 50%, production set to rise at Luverne
In Colorado, Gevo reported an update on the progress of the Side-by-Side operational mode of its plant in Luverne, MN. In the beginning of June, Gevo commenced the co-production of isobutanol and ethanol, with one fermenter dedicated to isobutanol production and three fermenters dedicated to ethanol production. With the completion of the last phase of capital for SBS, Gevo has begun to produce and ship isobutanol in railcar volumes.
In its 2nd quarter earnings release, Gevo reported that it would be installing distillation equipment at the plant, representing the final phase of capital for the SBS. This equipment facilitates the extraction of isobutanol from the plant, which should enable Gevo to boost production levels of isobutanol by debottlenecking the downstream side of the plant. This distillation equipment was commissioned in early September and is already showing improved results at the plant, such as:
— A doubling of isobutanol batch sizes;
— A 50% reduction in isobutanol batch turnaround times;
— Consistent yields of >90% based on starch content;
— A continued decrease in isobutanol production costs towards targeted economic rates.
“We are on track with the SBS. We completed the installation of our isobutanol distillation column and it operates well. We are continuing to boost isobutanol production levels while simultaneously driving cost out of our production processes. We are pleased to be shipping both ethanol and isobutanol in railcar quantities. This isobutanol is destined for the solvents and specialty gasoline blendstock markets, as well as to supply our demo plant in Silsbee, TX, to convert our isobutanol into hydrocarbons such as bio-jet fuel and isooctane,” said Dr. Patrick Gruber, Gevo’s CEO.
“By installing the last phase of capital at Luverne, we remain confident that we will be able to achieve production levels of 50-100 thousand gallons of isobutanol per month by the end of 2014. As we continue to learn and optimize the isobutanol production process, we believe we can ultimately increase our production rate to approximately 2-3 million gallons of isobutanol per annum under the SBS, while we are producing ethanol in the other three fermenters,” continued Gruber.
Analyst feedback
Jeffrey Osborne of Cowen and Company observed:
“Gevo offered up an update on its Side-by-Side operation after the close which we believe will be viewed as a positive for investors. A new distillation column is now in place and isobutanol volumes are in line with guidance at 50-100K gal/month. More work needs to be done to get to ultimate gal of 150-200K gal/month; however, we see this as an incremental near-term positive given past challenges.
“Gevo’s Luverne, MN plant, which as been running in “Side-by-Side” operations mode since June, has reached a new milestone with the commissioning of its distillation equipment in September. With one fermenter specifically dedicated to isobutanol production and the introduction of the distillation column, which will likely lessen bottlenecks further down he production line the plant has finally reached railcar volumes of production.
“Management highlighted that not only is this the final component of its capital investment into the SBS operations for the Luverne, MN plant, but this increased level of output will help to decrease isobutanol manufacturing costs down to a more competitive level. Isobutanol batch size has effectively doubled while turnaround times have been halved. Importantly, yields have consistently exceeded 90% relative to the available starch content.”
