Today, California Ethanol + Power announced its intention to enter into a 15-year marketing arrangement with global agribusiness leader CHS Inc. A letter of intent between the companies reflects their intent for CHS to be the exclusive marketer and distributor of ethanol to be produced at Sugar Valley Energy, a new energy campus to be constructed in Imperial County, California.

The parties are negotiating the terms of a relationship in which CHS would sell Sugar Valley Energy’s annual production of 68 million gallons of low-carbon fuel-grade sugarcane ethanol.

Located on a 160-acre site north of Brawley, Sugar Valley Energy will be a multi-plant campus consisting of sugarcane-to-ethanol, sugarcane to low-carbon power plus biomethane and wastewater treatment plants. Sugar Valley Energy is expected to complete financing this fall and break ground before the end of 2020 with ethanol production set to begin in 2023.

“The potential for an arrangement with global leader CHS is a significant step forward for Sugar Valley Energy, confirming the market potential for sugarcane ethanol. Highly respected, CHS has the expertise to bring our low-carbon ethanol to the markets where it will have the most positive impact,” said Dave Rubenstein, president and CEO of California Ethanol + Power.

CHS, the nation’s leading agribusiness cooperative owned by farmers, ranchers and cooperatives, produces 260 million gallons of fuel-grade ethanol and markets 900 million gallons of ethanol each year, making CHS one of the nation’s largest suppliers of ethanol-enhanced gasoline and the largest U.S. retailer of E85 ethanol.

“As an energy provider for rural America, CHS continues to identify new technologies and new partners to help enhance reliable energy supply for our owners from diverse sources, while minimizing environmental impact,” said Brian Schouvieller, senior vice president, CHS Global Grain Marketing. “We look forward to collaborating with California Ethanol + Power and Imperial Valley sugarcane growers on this initiative.”

“This deal with CHS is more than a win for California Ethanol + Power, it’s a long-term win for the community, environment and the future of low-carbon fuels. CE+P is continuing to make positive strides in moving this valuable project forward,” said Ian Parker, managing director, Royal Bank of Canada, which is leading the project financing for California Ethanol + Power’s Sugar Valley Energy.

Sugar Valley Energy will provide a long-term economically sustainable market for about 50,000 acres of sugarcane crop, which is highly suited for growth in the Imperial Valley climate. Sugarcane has a water demand similar to alfalfa, one of the region’s dominant crops. To grow the sugarcane needed, Sugar Valley Energy will seek long-term agreements with dozens of area farmers, providing a stable employment and income base for the community.

California currently imports more than 1.2 billion gallons of ethanol each year, and Sugar Valley Energy’s production will help the state be more ethanol independent.