SOURCE: NextFuels

NextFuels

August 19, 2013 09:00 ET

NextFuels to Produce Biofuels From Palm Plantation Residue

The Company Will Initially Focus on Southeast Asia, Where Biomass Fires Have Become a Major Source of Air Pollution

LOS ALTOS, CA--(Marketwired - Aug 19, 2013) - NextFuels, a pioneer in transforming agricultural residue into biofuels, unveiled its strategy today for economically producing transportation and industrial fuels from wet, unprocessed agricultural waste.

The underlying technology -- which was developed by Shell Oil over several years -- will allow NextFuels and its partners to produce bio-based petroleum at commercial scale for $75 to $85 a barrel out of wet biomass that has not been mechanically or thermally dried.

NextFuels will also provide palm plantation owners and others a way to transform the tons of residual plant matter generated by agricultural operations into a new, profitable second crop.

The company is collaborating on its commercial strategy with Enagra, a biofuel trading company with extensive contacts and partnerships throughout the industry, on the development of its technology. The two companies are owned by the same investors and managed by executives with extensive experience in biofuels. Over the past ten years, Enagra has conducted over $1 billion in biofuel transactions and will achieve revenues of approximately $150 million in 2013.

"Dr. Frans Goudriaan and Dr. Jaap Naber have been working on this technology for almost 30 years. With Dr. Ralph Overend's extensive background in the biomass and biofuels space, we are extremely excited to be moving this unique technology forward," said Michael Petras, CEO of NextFuels. "While we have a lot of work ahead of us, we look forward to helping solve the biomass issue in Malaysia."

The Market
Edible palm oil has surpassed soybean to become the largest source of cooking oil in the world, accounting for over 50 million tons of oil annually. While plantation owners have managed to increase the productivity of their land by 15X since the late 80s, the growth of the industry has created a corresponding residue problem. Approximately 4.4 to 6 metric tons of agricultural waste is generated for each metric ton of oil. There are over 1,000 crude palm oil (CPO) mills in Southeast Asia and a single (60 tons per hour) mill can generate 135,000 tons of agricultural residue a year.

The Technology & Process
NextFuels uses a system called bio-liquefaction that efficiently transforms agricultural biomass to green energy. Biomass is placed into the plant mixed with water. The mixture is then heated to 330� Celsius while pressure is increased to 220 bar. Increasing the pressure keeps the water from coming to a boil, which conserves energy. 

When cooled, the hydrocarbons form a putty-like substance called GreenCrude. Roughly 25% of the GreenCrude can be burned as a solid fuel in industrial boilers. The remaining 75% can be converted into a liquid-fuel equivalent to petroleum that is compatible with existing pipelines and vehicles. The equipment required to convert GreenCrude into liquid fuels, in a process called hydrodeoxygenation, is already installed at most refineries and can accept GreenCrude with minor refinements.

Unlike many other biofuels processes, NextFuels does not need to dry biomass before processing. The process is uniquely and specifically designed to work with wet biomass. As a result, the energy balance achieved by NextFuels process is approximately 65 to 70 percent, or 65 to 70 percent of the energy put into the system becomes useable energy. By contrast, processes like Fischer-Tropsch achieve energy balances of 40 percent or less.

Business Plan
NextFuels is currently raising funds to rebuild a bio-liquefaction demonstration plant originally created by Shell in 2005. The system ran for over 1,000 hours and is capable of producing 5 to 8 barrels of oil a day. Enagra and others will finance the cost of reassembling it and demonstrating production over the next 18 months. Within two to three years, NextFuels anticipates it will start to build its first commercial scale modules capable of producing 250 barrels of oil equivalent a day. Four modules capable of producing 1,000 barrels of oil equivalent a day will be the typical size of a NextFuels plant. Commercial scale modules will initially cost approximately $20 million and decline in price over time.

NextFuels will partner with plantation owners and others on various projects. NextFuels estimates that transforming residue into fuel could raise the value of plantation real estate by 30 percent or more per hectacre.

The Team
NextFuels has assembled a team of industry experts and leading scientist Michael Petras is the CEO of NextFuels. Mr. Petras has been in the biofuels and energy sectors for more than a decade; most recently he founded Enagra, a biofuel trading company that generated over $33 million in revenue in 2012. 

Dr. Ralph Overend, NextFuels Chief Scientist, has spent over 30 years at major research organizations, including the National Renewables Energy Laboratory. Dr. Overend will work with an engineering team of distinguished scientists, Dr. Jaap Naber and Dr. Frans Goudriaan. Dr. Naber and Dr. Goudriaan are co-founders of the bio-liquefaction technology, starting the process as Shell research scientists in the 1970s.

"There is no such thing as waste," said Dr. Overend. "The biofuel industry has been hampered by technological and economic challenges. We believe our system helps overcome many of these problems and we look forward to demonstrating it over the next few years."

About NextFuels
NextFuels is a pioneer in developing renewable fuels technology. NextFuels' technology converts wet biomass and agricultural residue into biofuel and bioenergy that is easily integrated into today's energy economy. For more information visit: www.nextfuels.com.

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