Provista signs LOI to help build Alabama ethanol terminal

By Bryan Sims | April 08, 2008
Web exclusive posted April 29, 2008 at 2:23 p.m. CST

Provista Renewable Fuels Marketing, a limited liability company under CHS Inc., has signed a letter of intent (LOI) to partner with Birmingham, Ala.-based Trans Load Limited Inc. and Blendstar LLC based in The Woodlands, Texas, in the construction and operation of an ethanol terminal in Birmingham, Ala.

Provista will be the exclusive supplier of ethanol products to the terminal. Trans Load and its Birmingham warehousing and transloading location, which is served by BNSF Railway, will be responsible for the placement and off-loading of rail cars. Blendstar will handle all of the engineering, construction and back-office accounting of the new storage facility.

The first phase will allow the terminal to store approximately 5 million gallons of ethanol per month. During the second phase, the facility will be expanded to hold between six and seven million gallons per month, according to John Litterio, director of renewable fuels wholesale marketing for Provista.

"What's important for us is that we've found two partners who can bring expertise in giving a reliable long term supply of ethanol to the area; not just a quick fix because the market obviously needs it [in the Southeast]," Litterio said. "This transload operation will be engineered properly with considerations for safety, environmental and security of the site."

The terminal's biggest advantage will be access to BNSF's existing rail spur, according to Litterio. The terminal will also be gated with fencing to prevent vandalism.

"This operation is primarily made for bulk transfer of full tank trucks of ethanol to local blender terminals in the area," Litterio said. "This isn't designed to be a splash blending operation. This is designed to be a bulk handling and bulk distribution operation."

According to Litterio, Trans Load has conducted preliminary dirt work on site and construction should begin soon. The new ethanol distribution facility is expected to be fully operational in July or August.

In April, Provista was acquired by CHS, after the closing of the merger between Vera Sun Energy Corp. and U.S. BioEnergy, which previously held a 51 percent stake in Provista. According to Litterio, the acquisition by CHS didn't affect Provista's decision to undertake its current endeavor.

"We saw this as a market we needed to be in," Litterio said. "This is our first attempt at putting this kind of deal together as a company. We'll see how successful this one is and I think if we prove we can put these things together fairly quickly and make them profitable and answer a need to the market, I think CHS is going to give us a lot of leeway to continue to do this."