Dallas investment firm buys U.S. Energy Partners

By | June 01, 2006
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One of the most innovative and unique ethanol plants in America—U.S. Energy Partners LLC (USEP) in Russell, Kan.—has been sold to fledgling ethanol firm White Energy Ltd., which was founded to "create clean and renewable energy solutions." White Energy is also developing a 100 MMgy ethanol plant in Hereford, Texas.

USEP was built in 2001 by Fagen Inc. and utilizes ICM Inc. process technology. The 40 MMgy facility takes in milo and wheat starch as feedstocks, is equipped with cogeneration capabilities that return excess electricity back to the grid of the local community, and has a wheat-gluten processing facility on-site. In addition, the Russell location served as an operators training facility for ICM, which had an ownership stake in the facility.

"This isn't just an ethanol plant," said Kevin Kuykendall of White Energy Ltd. "It is a complex, and the integrated operations were very attractive. This is one of the most well-run 40 MMgy plants in the country operating an ethanol refinery, a feed mill and a wheat gluten facility."

Kuykendall said the management team provided by ICM will continue to operate the plant.

The wheat-gluten plant adjacent to U.S. Energy Partners delivers about one-third of the ethanol plant's feedstock in the form of emulsified slurry. Wheat gluten is a product sold into the baking industry throughout the country. Each of the products of USEP—ethanol, carbon dioxide, distillers wet and dried grains, and wheat gluten—are sold by third parties into respective markets.

"USEP has built and operated a world-class facility that is an integral part of the local community, as well as an important component in our nation's drive for energy independence," said Garry Hayes of Nesnah Ventures, a Wisconsin-based investment group that has been involved with the Russell plant since its development phase. "We are confident that White Energy will continue to build on that level of success."

White Energy is an investment branch of White Ventures Ltd., a $250 million venture capital firm out of Dallas. Kuykendall said because of their proximity to large cattle populations, the Russell and Hereford locations are ideal for the distribution of distillers grains, which contributes to the success and long-term sustainability of any ethanol operation.