ZeaChem signs EPC deal for demo plant

By Kris Bevill | November 15, 2010
Posted Dec. 9, 2010

ZeaChem Inc. announced it has awarded the engineering, procurement and construction (EPC) contract for its demonstration-scale cellulosic ethanol facility to Burns & McDonnell, an employee-owned engineering firm headquartered in Kansas City, Mo. ZeaChem's 250,000 gallon per year facility will be located in Boardman, Ore., approximately two hours east of Portland. According to ZeaChem, foundations are being poured at the site and construction has already begun on the core unit of the facility. The plant is expected to be operational by the end of 2011.

ZeaChem President and CEO Jim Imbler said Burns & McDonnell signed a guaranteed maximum price agreement for its portion of the project however the details of the agreement were not released. Total program costs, including construction and operational activities, are expected to reach $73 million.

Imbler said Burns & McDonnell was selected to provide EPC services because the firm has experience in similar industries and is comfortable engineering a small-scale project. "You want to size your EPC for the technical challenge and the economics of the size of your plant," he said. "Burns and Mac certainly goes a lot bigger than this, but they're comfortable doing this size of a plant. If you use the big guys, they struggle with doing something the size of a demo plant."

ZeaChem plans to use a cross between biochemical and thermochemical processes to produce ethanol from various cellulosic feedstocks. The primary feedstock used at the facility will be hybrid poplar trees, which will be obtained from Greenwood Resources, the largest U.S. producer of that feedstock. In May, ZeaChem was approved for a $25 million U.S. DOE grant through the DOE's Office of Energy Efficiency and Renewable Energy Biomass Program, which will be used to fund the cellulosic ethanol production components of the facility. Imbler said the grant agreement calls for the company to experiment with feedstocks other than poplar, so the company plans to also utilize agricultural wastes and wheat straw.

A unique aspect of ZeaChem's technology is that it will not produce unwanted byproducts, such as CO2, Imbler said. It will produce biochemicals, including acetic acid and ethyl acetate, which can be sold on commodities markets. Imbler cautioned that the company doesn't plan to weigh its profitability against those products, however. "Ethyl acetate sells for double what ethanol does, but one of our commercial plants would produce all the ethyl acetate the U.S. needs," he said. "So if you're making a real niche chemical there might be a nice value but the thing people don't realize is if you try to push product into that market you're going to depress the price."

Imbler said ZeaChem is on track to produce cellulosic ethanol commercially at a cost of less than $1 per gallon. "We believe our competition is oil and if we can produce at that sub $1 cash cost basis we're in good shape and if there's extra incentives then we're in even better shape," he said. "But we're taking a long-term industry focus that we've got to be able to compete with crude."

Construction on a commercial-scale facility is tentatively planned to begin in 2012. ZeaChem would like to locate the commercial plant next to the demo facility in Boardman, however, state incentives will play a role in the company's final location choice.