Web exclusive posted Nov. 20, 2008 at 10:39 a.m. CST

Coskata Inc., an ethanol technology company based in Warrenville, Ill., has entered into an agreement with Clewiston, Fla.-based United States Sugar Corp., the nation's largest producer of cane sugar, to explore building a 100 MMgy cellulosic ethanol plant in Clewiston that would annually convert 1 million tons of sugarcane waste and bagasse into ethanol, according to Wes Bolsen, chief marketing officer and vice president of business development for Coskata.

Bolsen said under the agreement, United States Sugar will request a financial match from the Florida Energy Office to help fund engineering for the project and will seek loan guarantees from the USDA. The estimated $400 million ethanol plant could begin production as early as 2012, he added.

Discussions and plans between Coskata and United States Sugar had been on hold for several months pending a deal between United States Sugar and the state of Florida which would entail the company selling land south of Lake Okeechobee to the state for Everglades restoration. On Nov. 12, United States Sugar announced an agreement had been reached to sell 181,000 acres to the state for $1.34 billion and the company would lease-back the land for $50 per acre for a period covering seven crop cycles. Under the agreement, the sugar mill, refinery, citrus processing facilities, railroads, office buildings, equipment and the Gilchrist County citrus nursery will remain the property of United States Sugar. The company said a final contract must be considered and approved by the company's board of directors and also the South Florida Water Management District (SFWMD). Approval is expected in early December.

After General Motors Corp. announced in January 2008 that it was making an undisclosed strategic investment in Coskata, the ethanol technology company received numerous calls from parties interested in partnering to produce ethanol, Bolsen said. Coskata has been in discussions with United States Sugar since early 2008, according to Bolsen. United States Sugar's recent agreement with the state of Florida "broke everything loose," he said, "and laid out a very clear path for Coskata and United States Sugar to work together." Bolsen added that Coskata is in discussions with multiple companies to build ethanol plants and expects to make another major announcement before the end of the year.