BlueFire signs EPC contract for Fulton plant

By Kris Bevill | September 23, 2010
Posted Oct. 6, 2010

Future cellulosic ethanol producer BlueFire Renewables Inc. has made another step towards realizing its first commercial-scale facility. On Oct. 5, it announced that it has selected Wanzek Construction Inc., a subsidiary of MasTec Inc., to provide engineering, procurement and construction (EPC) services for BlueFire's 19 MMgy wood waste-to-ethanol plant in Fulton, Miss.

Wanzek will complete the engineering and construction of the facility in 22 months, at a fixed price of $296 million. Setting a fixed-price contract was crucial to BlueFire's U.S. DOE loan guarantee process, according to BlueFire CEO Arnold Klann. Achieving that goal sets a precedent for the cellulosic industry. "To my knowledge, no one in this industry has achieved this type of contract for a cellulosic biofuels project," he said. "It's a very unique contract."

Under the terms of the contract, if Wanzek fails to meet the price or agreed-upon schedule, it will be responsible for the damages. If BlueFire alters the construction plans, Wanzek receives some security through a change-order mechanism built into the contract. Klann said this type of low-risk construction agreement is exactly the type of contract that DOE wants to see and that BlueFire should now be able to finalize its loan guarantee with either the DOE or USDA. A start-date for construction is dependent upon financing approval from either agency, but BlueFire's goal is to break ground by early January, according to Klann. Itawamba County, where the site is located, will begin preliminary grading and infrastructure installment at the beginning of November, he said.

Wanzek won the competitive bid for the BlueFire project partially because it was the lowest bidder, but also because BlueFire leaders felt it had the best approach for its first-of-its-kind plant. "We needed someone that had the capabilities of conceptualizing how to scale up from a smaller pre-commercialization plant to a much larger plant," Klann said. "They clearly rose to the top with their pricing and the way they wanted to execute the project. I frankly was amazed they were able to achieve this [fixed-price]."

Jose Mas, CEO of MasTec Inc., said his company looks forward to a long-term relationship with BlueFire. "We are glad to be a part of the initial roll-out and we look forward to working with BlueFire on a number of other opportunities," he said.

BlueFire also recently signed long-term feedstock procurement contracts and offtake agreements for the Fulton facility.