Gevo and Avfuel Enter into Renewable Jet Fuel Supply Agreement
June 21 2018 - 7:00AM
Gevo, Inc. (NASDAQ:GEVO) announced today that it has entered into a
long-term agreement to supply its renewable alcohol-to-jet fuel
(ATJ) to Avfuel Corporation, effective July 1, 2018 (the “Supply
Agreement”). Avfuel is a leading global supplier of aviation fuel
and services to all industry consumer groups, servicing more than
3,000 locations worldwide. The Supply Agreement with Avfuel is
Gevo’s first long-term commercial supply agreement for its ATJ.
“We are pleased to have a customer and partner
like Avfuel. Avfuel has tremendous reach with more than 650
Avfuel-branded locations and 3,000-plus fueling locations worldwide
to a vast scope of customers. We appreciate its vision and
leadership in working with us to bring a better and more
sustainable fuel to the market place. Not only can we reduce
greenhouse gas emissions, but we also can produce a higher quality
product than petroleum-based jet fuel from a technical standpoint.
The whole supply chain should benefit, as well as the end customer.
This contract with Avfuel is an excellent first step and will serve
as a catalyst for Gevo to build up the aggregate demand so we can
proceed with the development of a larger scale ATJ facility,” said
Patrick Gruber, Gevo’s chief executive officer.
Craig Sincock, owner, president and CEO of
Avfuel said, “As a leader in the global supply of aviation fuel and
services, we have a social responsibility to make sustainable
alternative jet fuel a reality in the marketplace. Our agreement
with Gevo is a notable component in our overall strategy to support
our industry’s commitment to reduce carbon emissions and enhance
sustainability to mitigate its effect on climate change.”
Sincock remarked that the agreement with Gevo
will help the company meet the demand of its customers for a
low-carbon, alternative jet fuel, filling a gap in the industry’s
supply chain.
The Supply Agreement contemplates two phases.
During the first phase, Gevo will supply Avfuel from its
smaller-scale hydrocarbon processing facility it operates in
Silsbee, Texas, in partnership with South Hampton Resources, Inc.
(the “Silsbee Facility”). Currently, the Silsbee Facility has
the capacity to produce approximately 70,000 gallons of renewable
hydrocarbon products per year (50% of which is ATJ and 50% of which
is isooctane).
During the first phase, Gevo expects to
construct a larger-scale hydrocarbon facility at its existing
ethanol and isobutanol production facility located in Luverne,
Minnesota, (the “Luverne Facility”) to produce larger quantities of
ATJ (the “Luverne Hydrocarbon Facility”), subject to Gevo's receipt
of sufficient financing. Upon completion of the Luverne Hydrocarbon
Facility, the second phase of the Supply Agreement would commence,
which would have a term of five years, subject to extension upon
the mutual agreement of the parties. During the second phase, Gevo
would supply Avfuel with larger volumes of ATJ, ramping up to
1,000,000 gallons of unblended ATJ per year, which, when blended
with conventional jet fuel, would produce many millions of gallons
of finished ASTM D1655 jet-fuel product for distribution per
year.
With further regard to the environment, for
every one million gallons of ATJ produced, approximately 20 million
pounds of animal feed and protein would also be produced and sold
into the food chain. To produce ATJ, Gevo fractionates grain to
produce protein and animal feed while using the residual
carbohydrate portion of the grain for fermentation to produce the
intermediate chemical: isobutanol. The isobutanol is then
chemically transformed using a hydrocarbon processing facility into
ATJ meeting ASTM D7566 (standard specification for aviation turbine
fuel containing synthesized hydrocarbons). The ATJ made by this
process has very low sulfur, low particulates, and higher energy
density than petro-based jet fuel.
About Gevo
Gevo is a leading renewable technology, chemical
products, and next generation biofuels company. Gevo has developed
proprietary technology that uses a combination of synthetic
biology, metabolic engineering, chemistry and chemical engineering
to focus primarily on the production of isobutanol, as well as
related products from renewable feedstocks. Gevo can produce
isobutanol, ethanol and high-value animal feed at its production
facility in Luverne, MN. Gevo has also developed technology to
produce hydrocarbon products from renewable alcohols. Gevo
currently operates a biorefinery in Silsbee, TX, in collaboration
with South Hampton Resources Inc., to produce renewable jet fuel,
octane, and ingredients for plastics like polyester. Gevo is
committed to a sustainable bio-based economy that meets society’s
needs for plentiful food and clean air and water. Learn more at our
website: www.gevo.com.
About Avfuel Corporation
Avfuel provides fuel and services to the global
aviation industry and is the leading independent supplier in the
United States. Established as a supply and logistics company 45
years ago, Avfuel is core competent in every aspect that surrounds
the delivery of fuel—from refinery to wingtip. Avfuel combines
global access with personalized service throughout a fueling
network of more than 3,000 locations worldwide and 650+
Avfuel-branded FBOs. Our 100% dedication to aviation demonstrates
our passion and commitment to a global community that prospers on
the movement of goods and services around the world.
Forward-Looking Statements
Certain statements in this press release may
constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements relate to a variety of matters,
including, without limitation, statements related to Gevo’s ability
to perform its obligations under the Supply Agreement, whether the
transactions contemplated by the Supply Agreement will be
completed, Gevo’s plans and ability to construct the Luverne
Hydrocarbon Facility, the demand for Gevo’s ATJ and renewable, low
carbon jet fuel, and other statements that are not purely
statements of historical fact. These forward-looking statements are
made on the basis of the current beliefs, expectations and
assumptions of the management of Gevo and are subject to
significant risks and uncertainty. Investors are cautioned not to
place undue reliance on any such forward-looking statements. All
such forward-looking statements speak only as of the date they are
made, and Gevo undertakes no obligation to update or revise these
statements, whether as a result of new information, future events
or otherwise. Although Gevo believes that the expectations
reflected in these forward-looking statements are reasonable, these
statements involve many risks and uncertainties that may cause
actual results to differ materially from what may be expressed or
implied in these forward-looking statements. For a further
discussion of risks and uncertainties that could cause actual
results to differ from those expressed in these forward-looking
statements, as well as risks relating to the business of Gevo in
general, see the risk disclosures in the Annual Report on Form 10-K
of Gevo for the year ended December 31, 2017, as amended, and in
subsequent reports on Forms 10-Q and 8-K and other filings made
with the U.S. Securities and Exchange Commission by Gevo.
Investor and Media ContactShawn
M. SeversonIntegra Investor Relations+1
415-226-7747gevo@integra-ir.com
Avfuel Corporation ContactMarci AmmermanVice
President
Marketing734-663-6466mammerman@avfuel.comwww.avfuel.comfacebook.com/avfuelTwitter:
@Avfuel
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