Nova Biosource facility off-line due to fire

Web exclusive posted Oct. 8, 2008 at 10:44 a.m. CST

A fire at Nova Biosource Fuels Inc., a 10 MMgy biodiesel plant in Clinton, Iowa, broke out Sept. 30 in the primary biodiesel recovery column.

The fire, which was contained within the column, was quickly extinguished by local firefighters, according to the Houston-based company. The facility, which had been idled for maintenance at the time of the incident, will continue to be shut down for damage assessment and repairs.

The cause of the fire is under investigation, but preliminary assessments pointed to a buildup and ignition of methanol vapors in the column during a ventilation process required as part of the maintenance activities. No refinery personnel were injured during the incident, although one firefighter received minor steam burns during the fire fighting efforts.

"We continue to conduct a thorough review of the incident and expand our fire protection and safety measures," Hern said. "We are thankful that there were no injuries to any refinery personnel and that the steam burns suffered by the fire fighter were minor. We truly appreciate the prompt and professional response by the local fire department."

Hern said that the plant is being evaluated by Nova's engineering team and insurance adjusters to determine an accurate assessment of damages, repairs and resulting down time. Nova said it will also review its existing fire prevention and protection equipment, systems and procedures to ensure their adequacy. The company didn't disclose exactly when the plant would be operational again, but it "will likely exceed 60 to 90 days and may be combined with previously planned capital upgrades."

Nova Biosource also recently reached an agreement with its project lender to amend its credit agreement for its 60 MMgy biodiesel plant in Seneca, Ill. The amendment extends the required date for conversion of the construction loan to a term loan from September 30 to December 31.

"We will continue to operate our Seneca refinery at the maximum capacity our working capital will permit and to market our share of production from the Scott biodiesel refinery," said Kenneth Hern, chairman and chief executive officer for Nova Biosource.