Texas glycerin firm acquires equity interest in Energy Partners

By Bryan Sims | October 19, 2011

The Woodlands, Texas-based glycerin marketing and refining company BenchMark Energy Corp. has signed an agreement to acquire a 49 percent stake in Indiana-based Energy Partners LLC with an option to acquire the remaining 51 percent contingent on certain IRS tax criteria in 2012.

Founded in 2009, Energy Partners is a renewable energy company that has approximately $750,000 in glycerin sales in the nine-month period ending Sept. 30. The company is in discussions with the city of Grand Forks, N.D., to build a 21,600 square-foot, eight-acre glycerin processing facility. The project was approved by the Grand Forks Growth Fund committee and the Jobs Development Authority, and upon completion of the project, expected mid next year, Energy Partners plans to hire 29 full-time employees at the facility. The future facility is expected to have the capacity to process approximately 10 million gallons of crude glycerin annually sourced from a number of biodiesel plants within an 800-mile radius of Grand Forks, according to BenchMark chairman and CEO Mark Bateman.

“Once we crack it out and get it refined, we’ll get somewhere around 6.5 million gallons of refined glycerin per year,” Bateman told Biodiesel Magazine, adding that he anticipates refined glycerin to have an average market value of $1.80 per gallon come next year due to the uptick in biodiesel production. “We’re not going to make pharmaceuticals or cosmetics out of it because we don’t control the feedstock that glycerin comes from.”

The RFS2 mandates that 1 billion gallons of biodiesel are to be blended into the U.S. diesel pool by next year, which translates into roughly 100 million gallons of crude glycerin expected to hit the market. Recognizing this, Bateman said he expects that the equity stake in Energy Partners will dramatically expand his company’s customer base for marketing the byproduct that could be used in a number of applications.

Currently, Bateman said BenchMark is trading most of its crude glycerin into the asphalt manufacturing market, but he added that the company intends to distribute its refined and crude grades of glycerin to additional market segments for use in other applications such as an energy enhancer in coal-firing operations or blended with sludge oils like bunker fuel (No. 6 grade diesel) to be used as a fuel source in the rail and shipping industries.

“The barge traffic buys the roughest crude (glycerin) they can get,” Bateman said. “If we can get 10 percent glycerin in their fuel, it’ll clean up their fuel the same way that we’re trying to get into coal operations.”

Among other markets, BenchMark is exploring distributing its future refined glycerin as a supplement in animal feed or possibly as a substitute or supplement to harsh chemicals used in the fractionation of underground oil and gas exploration operations.

“We will add value to the glycerin and the biodiesel plants will supply us a product that we can work with,” Bateman said. “I think that with the RFS2 and the RIN number situation, there will be enough biodiesel in the U.S. to make it all work very efficiently.”


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