Press Releases

Port Could Get 2nd Biodiesel Plant

February 2, 2008

STOCKTON - USBioDiesel Group LLC, a biodiesel refining and trading startup based in San Francisco, announced plans Monday to establish refining plants in Stockton and in Seabrook, Texas.

If realized, it would be the second biodiesel plant and the third biofuel facility at the Port of Stockton, where Pacific Ethanol is building an ethanol refinery and Community Fuels is installing biodiesel production equipment.

USBioDiesel Group raised nearly $100 million in private equity in July, according to a company release. Primary investors include U.S. Renewables Group, a private equity renewable investment fund; ED&F Man, a major international commodity trading company; Ohana Holdings, an Omidyar family investment fund; and Supreme Oil, a division of Admiration Foods, one of the largest U.S. soybean oil buyers.

Deputy Port Director Jeff Kaspar, who directs the port's property management, said USBioDiesel is moving its project through the state environmental review process before formally seeking a lease at the port.

"You cannot conclude that it would be necessarily permitted," Kaspar cautioned. However, given that two similar projects already have passed environmental review, he added, "we don't anticipate anything that cannot be overcome."

The port is attracting attention from biofuels producers because of its transportation links, specifically two major railroads providing connections to the Midwest as well as worldwide maritime shipping.

"They depend on supply from both national and international markets of their raw product," Kaspar said. "It just gives them the option to trade within the international marketplace to meet the raw product needs of their companies."

Biodiesel is typically made from vegetable or animal oils and ethanol from corn.

Additional, yet unnamed biofuel producers are interested in the port, officials said.

"If those that have expressed an interest, those we have determined to be capable financially, ... if they were all to come to fruition, the Port of Stockton would become a very large player," Kaspar said.

In the news release, USBioDiesel said it would open its Texas plant, on the Houston ship channel, in May. Stockton would be its second production facility.

"To lower logistics costs, our assets are located close to the fuels customer on coastal oil terminals at the nation's major refinery hubs," said Kyle Datta, USBioDiesel's chief executive.

He also expressed confidence that the company is well-positioned for the inevitable ups and downs of the commodities markets.

"Our business partners, ED&F Man, Lansing and Supreme Oil, are leaders in commodities trading, logistics and risk management. Thus, we are designed to prosper during the inevitable industry cycles," Datta added.

"The global biodiesel industry is at a crossroads and will undergo a major consolidation this year," he said. "USBioDiesel Group will be one of the long-term winners in this rationalization."

Contact:

Reed Fujii
Tel: (209) 546-8253
rfujii@recordnet.com
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