Date of this Version
The purpose of this project is to design a commercial-scale facility to produce 50 million pounds per year of 1,4-butanediol (BDO) from a renewable feedstock. A genetically engineered strain of Escherichia coli developed by Genomatica, Inc. will metabolize a molasses feed, delivered from an adjacent sugar and ethanol facility, into BDO. The BDO product purity and quality must meet or exceed current commercial requirements for polymer-grade material to be acceptable to prospective customers. The innovative technology to produce environmentally-friendly BDO will convert biomass-derived and renewable feedstocks in fewer steps than traditional petrochemical routes, with no toxic byproducts and minimal greenhouse gas emissions.
Our BDO plant will be built in São Paulo, Brazil. This location was chosen due to its proximity to our sister sugar and ethanol facility. Despite the need to stop production for three months in mid-December through mid-March during the rainy season, when our sister plant will cease its molasses production, we determined that the low cost per amount of sugar from the Brazilian molasses will outweigh the ability to run year-round in a corn-based facility in the Midwestern United States. To account for the downtime associated with the rainy season, our facility has included extra molasses storage capacity to extend production for an additional month after our sister facility shuts down. We also anticipate 10 days of downtime due to maintenance and cleaning, which will result in about 290 days of full-scale facility operation.
An economic analysis of our design demonstrated profitability after the first year of operation. Our feed materials, corn steep liquor, oleic acid, process water, and molasses, will cost us a total of about $200 per ton of BDO produced. But our vinasse co-product, which will be sold back to our sister sugar and ethanol plant for fertilizer, will result in additional revenues of $190 per ton of BDO produced. The selling price of the vinasse is discounted by 70% of the current fertilizer market price since we are selling it back to our sister facility, in return for discounted molasses and electricity. The direct permanent investment of the plant will be about $10.5 million and startup costs will be about $1.5 million, which results in a total permanent investment of $13.5 million. The net present value (NPV) of our facility with 15 years of production is $283 million and the internal rate of return (IRR) is 157%. We intend to sell our 99% pure BDO at $2,420 per ton produced, which will result in revenues of $72.5 million per year based on our commercial-scale production of 8,600 pounds of BDO per hour. Due to the profitability of our design, we will be able to sell our BDO at the low end of the U.S. market price range of $2,420 – $2,840 per ton, as was reported in the third quarter of 2010. Future research may need to be conducted to find out if additional equipment is needed in the actual plant, or if we were too optimistic on our pricing for the raw materials and utilities.
Date Posted: 24 July 2012