BP, ABF and DuPont To Build Biofuel Plant [WSJ]
By BENOÎT FAUCON
June 28, 2007; Page A9
LONDON -- BP PLC unveiled a joint venture with Associated British Foods PLC and DuPont Co. to build a $400 million biofuel plant in the United Kingdom.
The deal moves BP, which is trying to revamp its image as a "green" company, one step closer to industrial production from the research laboratory.
With the exception of Marathon Oil Corp. of Houston, most big Western oil companies have yet to announce industrial-scale plans to produce plant-based gasoline. Marathon, in partnership with Ohio-based grain reseller Andersons Inc., is building an ethanol plant in Greenville, Ohio.
BP and conglomerate ABF, both based in London, will each hold 45% of the yet-to-be formed joint venture, and chemical company DuPont of Wilmington, Del., will hold the remaining 10%.
The plant will produce bioethanol from wheat and is expected to start producing in late 2009, BP said.
The biofuel plant will be built at BP's U.K.-based chemicals site at Saltend, Hull, with a capacity of about 110 million gallons of bioethanol a year.
The companies, however, shrugged off concerns that such an initiative could substitute improved energy security with increased food prices.
At a news conference, Mark Carr, chief executive of ABF unit British Sugar, said the plant's supply would be drawn from U.K. surplus wheat, which represented about two million tons available to export in the latest season. The facility, however, will use about half of that amount annually, which comes in addition to several similar-size ethanol-plant proposals using U.K. wheat.
Iain Conn, BP's new chief executive for the refining and marketing business, said the "impact on food prices is unlikely to be material." But he added that BP's "goal is to migrate to second-generation biofuels," which are based on nonedible vegetal elements.
BP said the plant will initially produce bioethanol, but the partners will look at the feasibility of converting it to biobutanol once the technology is available. BP and DuPont intend to build a jointly funded biobutanol demonstration plant that will run parallel to the main plant to support this objective, which will start operations in early 2009.
Biobutanol is similar to ethanol, which is regularly blended with gasoline, but is viewed as having several advantages, such as being transportable via gasoline pipelines. |
