Mascoma Corp. says it is actively seeking project financing to build its two proposed cellulosic ethanol plants amid news that Valero Energy Corp. is no longer involved in its U.S. project planned for Kinross, Mich.

Bill Day, Valero’s vice president of media and community relations confirmed reports of the split in an email to Ethanol Producer Magazine. He declined to give additional details, saying the company doesn’t typically discuss investment amounts publically and referred additional questions to Mascoma.

The two companies announced an agreement in late 2011, with Valero taking on the financing of construction and start-up of Mascoma’s planned 20 MMgy cellulosic ethanol plant in Kinross, Mich. The terms of the agreement called for Valero providing project management during the construction phase, operating the facility once completed and marketing the ethanol produced at the plant. The two companies formed a joint venture in known as Frontier Renewable Resources LLC, a hardwood pulpwood-to-cellulosic ethanol facility, construction on which was, at that time, expected to begin in 2012.  

Mascoma provided a written statement that didn’t refer to Valero pulling out of the project. Instead, the company said it was “working on securing the necessary project financing to construct its two planned cellulosic ethanol plants—one in Kinross, Mich., and the other in Alberta, Canada.”

Detailed design engineering was completed on the Kinross project, with engineering, procurement and construction bids finalized, the company said in its statement. “Mascoma is currently focused on securing the remaining financing for project and will not proceed until there is a firm commitment for all the required funding.”  

In addition, Mascoma said it has been working with the U.S. DOE and the state of Michigan about the project’s status, both of which previously awarded funding for the project. “To date, Mascoma has met all of the grant obligations for the state and federal funding that the company has received,” the prepared statement said. “At this time, Mascoma cannot determine the start date for construction of the Kinross project, but the company continues to pursue new options and actively engage with interested parties.”

Development of the second project, a 72 MMlly (19 MMgy) woody biomass-to-cellulosic ethanol facility planned for in Drayton Valley, Alberta, is also proceeding. “Mascoma is working with the Sustainable Development Technology Canada, a foundation funded by the Canadian Government, on this project,” the statement said.

Mascoma, which withdrew an initial public offering this spring, also declined to answer additional questions, at this time. One of the unknowns is whether Valero is still planning to use Mascoma’s engineered yeast product, Transferm, in some or all of the company’s 10 corn-ethanol plants. The two companies had signed a commercial agreement in 2012. In June Mascoma and Lallemand Biofuels and Distilled Spirits announced the introduction of its next generation advanced yeast, called TransFerm Yield+.