Grapevine, TX-based GreenHunter received port permission to take over an option for the land from Port Sutton Envirofuels, a local company that recently shelved plans to build an ethanol plant there. GreenHunter acquired the lease option for approximately $1 million in cash and restricted common stock valued at $14.25 per share.
GreenHunter initially wants to build a biofuels terminal and later a biodiesel production refinery on the property. The $70-million project would create 250 temporary construction jobs and 50 to 60 full-time jobs once the biofuels plant is up and running. Port officials estimate the plant would take 12 to 18 months to build. The lessee plans to use vegetable oil as stock for biofuels during initial operations but later may switch to animal fat.
Should the company decide in the next nine months to exercise its option to lease the site, the ground lease would carry a minimum term of 40 years. Additional consideration of approximately $2 million in restricted common stock would be due no later than 18 months from closing. The sum would be calculated based on an average trading price between $14.25 and $25 per share.
"Strategically, this asset represents another important step in the execution of our business plan to vertically integrate our biodiesel production and marketing businesses," says Gary C. Evans, GreenHunter chairman, president and CEO. "Due to the prime location on the Gulf Coast of Florida, we foresee this asset as establishing a foothold in a deep-water port that handles over half of the transportation fuel used in the state of Florida."
According to GreenHunter, the site is strategically located at a deep-water berth in Port Sutton, with access to rail, truck, barge and deep-water ship transport. Evans says the company will be able to use the property not only for production and distribution of its own biofuels, but also for handling imported biofuels from other companies. He reports Florida consumed more than 1.6 billion gallons of diesel fuel last year.
GreenHunter Energy owns and operates the nation's largest biodiesel refinery. The Houston plant has a production capacity of 105 million gallons per year. The refinery was shut down last month due to a direct hit from Hurricane Ike, but the company expects to restart production in the next several weeks.
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