Syntroleum, Tyson partner to produce renewable diesel

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Syntroleum Corp. and Tyson Foods Inc. have jointly created Dynamic Fuels LLC to build multiple, stand-alone facilities producing what they call "ultra-clean, high-quality, next-generation renewable synthetic fuels," or renewable diesel.

The first facility using Syntroleum's trademarked Biofining technology will produce about 75 MMgy from low-grade animal fats, greases and vegetable oils supplied by Tyson. The $150 million project is slated to be on line in 2010 somewhere in the south-central United States.

Syntroleum CEO Jack Holmes said the Biofining process doesn't compete with traditional biodiesel producers using vegetable oils and higher grades of animal fats. "We take very low-quality animal fats, too low of quality to make biodiesel, to produce a high-quality fuel," he said. "Tyson is responsible for aggregating the feedstock. We know there's enough for a handful of these plants using our unique technology." He added that Syntroleum has tested 50 different combinations of low-quality nonfood feedstocks, and "all make the same high-quality fuel."

Biofining produces summer-, winter- and arctic-grade renewable diesel, as well as renewable jet fuels, by processing triglycerides and/or fatty acids with heat, hydrogen and proprietary catalysts. The company claims the resulting fuel provides substantial advantages over petroleum-based fuel, including higher cetane levels, significantly lower nitrogen oxide levels and near-zero sulfur emissions. In addition, it provides superior thermal stability and better cold flow properties. The unblended fuel can be used in existing diesel engines with no engine modifications.

In early July, Syntroleum announced the completion of a contract with the U.S. Department of Defense to supply 500 gallons of its synthetic jet fuel produced from fats for testing in military turbine applications. Holmes said the U.S. Air Force has announced a goal of sourcing 50 percent of its fuel needs from domestic alternative sources by 2016. Last year, Syntroleum supplied 100,000 gallons of synthetic Fischer-Tropsch jet fuel used in a 50-50 blend for B-52 bomber test flights. The company predicts its Biofining process will create renewable fuels comparable with its high-quality Fischer-Tropsch fuels.

Tulsa, Okla.-based Syntroleum Corp. announced in mid-July that it had successfully raised its $4.25 million share in the joint venture. The total $8.5 million contributed by both partners in Dynamic Fuels will be used to select the plant site, and prepare the process design package and front-end engineering for development of the first commercial plant. Syntroleum's recent sale of common stock under its existing purchase agreement with Azimuth Opportunity Ltd. provided the funds for its share of the venture funding.