CVEC contracts for expansion project

October 26, 2006

In a move to respond to long-term energy trends, Chippewa Valley Ethanol Company (CVEC) in Benson, Minn., has contracted with Fagen Inc. to build a 40 MMgy ethanol facility adjacent to its existing plant. This is CVEC's second expansion in 10 years. It expanded from 15 MMgy to 40 MMgy in 2002, and is currently operating at a 45 MMgy capacity.

The letter of intent that was signed between CVEC and Fagen called for a construction start date in or before July 2008. According to CVEC General Manager Bill Lee, the plant will be a Fagen/ICM Inc. design/build package, more standard than CVEC's current plant, which is designed to handle wheat or corn and can produce both industrial- and fuel-grade alcohol.

"Over the past few years, this Fagen/ICM plant design has demonstrated an unparalleled level of reliability and productivity," Lee said. "We believe that with this expansion project, CVEC can maintain a competitive operating scale, broaden our processing capabilities and enhance our overall productivity."

Lee said the new plant will be a separate operating unit but will share the same operation company. He said CVEC is working on the details of where and how to integrate the new facility with the current infrastructure. Other details under discussion include permitting, utilities, engineering, financing and staffing. Lee said the new facility will add 20 to 25 jobs to CVEC's staff.

Another project that CVEC is working on prior to expansion is a biomass gasification system. As EPM previously reported, CVEC is working with Frontline BioEnergy Inc. to develop Frontline's first commercial-scale biomass gasifier, which will be used to power CVEC's existing plant. "We hope to have start-up of the Phase I gasifier by next summer," Lee said. Three phases will determine if the technology works, if it can be done at a capital cost that makes sense, and if feedstock can be acquired at an economically feasible rate. "If we are successful in displacing natural gas on our current site, we will do that on the new site, as well," Lee said.

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