AB Foods Regulatory News (ABF)

26 Jun 2007 09:29

BP PLC26 June 2007 June 26, 2007 BP, ABF AND DUPONT UNVEIL $400 MILLION INVESTMENT IN UK BIOFUELS The wide spread availability of biofuels in the UK took a major step forwardtoday as BP, Associated British Foods (ABF) and DuPont announced majorinvestment plans, totalling around $400 million, for the construction of a worldscale bioethanol plant alongside a high technology demonstration plant toadvance development work on the next generation of biofuels. The bioethanol plant, in which BP and ABF subsidiary British Sugar would eachhold 45 per cent with DuPont owning the remaining 10 per cent, will be built onBP's existing chemicals site at Saltend, Hull. Due to be commissioned in late2009, it will have an annual production capacity of some 420 million litres fromwheat feedstock. Although initial production would be bioethanol, the partners will look at thefeasibility of converting it to biobutanol once the required technology isavailable. "We are delighted to be announcing, subject to the necessary approvals, theconstruction of a world scale bioethanol plant in Hull with our partners ABF andDuPont to enable petrol biocomponents to be available to meet the 2010 RenewableTransport Fuel Obligation," said Iain Conn, chief executive officer of BP'srefining and marketing business. "In addition we have also selected Hull as thepreferred location for a planned biobutanol demonstration plant as laboratoryresearch work on the production of this first advanced biofuel that we andpartners DuPont will bring to market is progressing well." Discussions are currently underway to explore strategic partnerships with graintrading business Frontier Agriculture for the supply of locally grown wheatfeedstocks and with co-product marketing company AB Agri in relation to DDGS, abyproduct of bioethanol manufacture. It is expected that formal agreements wouldbe finalised after regulatory approvals are obtained. "We are delighted that this exciting new project has achieved this importantmilestone, and are confident that construction work will commence early nextyear after the required regulatory approvals are obtained," said Mark Carr, CEOof British Sugar. "Front end engineering and design work will commenceimmediately with Aker Kvaerner leading the project and their joint venturepartner Praj providing the technology expertise." Although the plant will be built from scratch, it will have access to theexisting infrastructure at the BP site for essential supporting services. Onceoperational it will provide around 70 new full-time posts in addition to theemployment opportunities generated by the construction phase. The BP site in Hull has also been selected as the preferred location for aplanned biobutanol demonstration plant, funded and owned equally by BP andDuPont which could produce around 20,000 litres of biobutanol a year from a widevariety of feedstocks. "Over the last year, we have accelerated the commercial development ofbiobutanol," said John Ranieri, head of DuPont Biofuels. "The demonstrationfacility, which will begin operation in early 2009, will develop the processingparameters and further advance the commercial deployment of our new technology.At the same time, the growing market demand for biofuels is significant. We areconcurrently investing in the Hull bioethanol facility with the intention toincrease that investment once biobutanol process technology development iscompleted and conversion feasibility is validated." To begin market development of biobutanol, BP and DuPont are also establishinginitial introduction plans for biobutanol in the UK. The companies will importsmall quantities of biobutanol, sourced from an existing first generationmanufacturing facility in China. The first product is expected to arrive by theend of the year and will be used to carry out infrastructure and advancedvehicle testing. This testing will build upon initial laboratory engine tests using conventionalbutanol which indicated that butanol has similar fuel performance properties tounleaded petrol. In addition, work will be undertaken to gather comprehensivedata on the environmental footprint and sustainability of this next generationfuel. "The three initiatives we have announced today represent a significant firststep in delivering BP's strategy for biofuels," commented Phil New, head of BPBiofuels. "As a UK based company, BP is delighted to be the first energy companyto commit significant resources to building this important market of the futurein the UK, and at the same time, bring a new product of global relevance closerto reality." Notes to Editors: • An electronic press kit, including downloadable images, is available at http://www.launchgroup.co.uk/epk/bpbiofuels/ • Transport accounts for around 21 per cent of all carbon dioxide emissions. • The Renewable Transport Fuel Obligation (RTFO) requires 5 per cent of UK transport fuel to come from biofuels by 2010. • BP and DuPont announced the creation of a partnership to develop, produce and market a next generation of biofuels in June 2006. The partnership leverages DuPont's world-class biotechnology and bio-manufacturing capabilities with BP's fuels technology expertise and market knowledge. • Biobutanol has a low vapour pressure and its tolerance to water contamination in gasoline blends facilitate its use in existing gasoline supply and distribution channels. It has the potential to be blended into gasoline at larger concentrations than existing biofuels without the need to retrofit vehicles and it offers better fuel economy than gasoline-ethanol blends, improving a car's fuel efficiency and mileage. • BP is already a leading player in the biofuels market, accounting for around 10 per cent globally, blending and distributing 800 million gallons of ethanol in 2006. • BP is funding a $9.4 million project in India to demonstrate the feasibility of producing biodiesel from jatropha curcas. • BP's Bulwer Refinery in Queensland, Australia will produce around 110 million litres of biodiesel a year from tallow feedstock. Further information: BP Press Office, London, tel: +44 (0)207 496 4076Associated British Foods, London, tel: +44 (0)207 399 6500DuPont Press Office, USA, tel: +1 302 774 7447 - ENDS - This information is provided by RNS The company news service from the London Stock Exchange