Plantations International News
Green Plains and petrol retailer Murphy USA have signed a definitive agreement regarding the purchase by Green Plains of Murphy USA’s ethanol production facility located in Hereford, Texas.
Under the terms of the agreement, Green Plains will acquire Hereford Renewable Energy for approximately $ 93.8 million (€85 million), subject to customary closing adjustments. The transaction value includes $ 78.5 million for the ethanol production facility with the balance for working capital. The transaction is expected to close this month subject to customary closing conditions and regulatory approvals.
The facility is a Lurgi-designed, ICM-modified ethanol plant with approximately 100 mgy of production capacity, a corn oil extraction system and other related assets.
‘The Hereford facility has many strategic and financial advantages over other destination plants because of its location, leading to both export and domestic market opportunities for ethanol and distillers grains,’ says Todd Becker, president and CEO of Green Plains. ‘Because it is located near the largest concentration of cattle in the world, with over a million head of cattle fed within a 50-mile radius, the plant can produce a low carbon intensity fuel which is typically sold for a premium to ethanol produced at most other plants.’
The facility’s production capacity is complemented by a shuttle unload facility that can unload 40,000 bushels of corn per hour, a double-loop track that holds two unit trains at a time and a grain handling system with over 4.8 million bushels of storage. The plant also has 4.5 million gallons of ethanol storage capacity.
‘We intend to utilise this asset and its shuttle train unload capability to serve the local market with corn and distillers grains produced in the Midwest to further improve the overall economics of the facility,’ adds Becker. ‘The value of this acquisition goes well beyond just producing ethanol.’
The company will offer the facility’s transportation and storage assets to its master limited partnership, Green Plains Partners.
Biofuels Plantations International