Rentech Invests in Biomass Gasification Companies

Rentech Inc. (AMEX:RTK), a clean-energy-biomass technology company, this week completed investment agreements with two biomass gasification companies, acquiring 100 percent of  SilvaGas Corporation and grabbing a 25 percent stake in ClearFuels Technology Inc.

Financial details of the deals were not disclosed. With the acquisitions Rentech has broadened its technology portfolio and and the range of its biofuel processing capability while increasing its geographic scope from Hawaii to Georgia.

Rentech, based in Los Angeles, said the agreements are "major steps forward" for its strategy of offering various options for coverting urban and rural biomass feedstocks into energy products such as synthetic jet fuel, diesel fuel and electric power.

The company signed a definitive agreement to acquire Atlanta-based SilvaGas and its commercial-scale biomass gasification technology, which converts urban waste feedstocks into syngas.

Rentech also completed agreements with the Aiea, Hawaii-based ClearFuels, a bio-energy gasification and project development company. ClearFuels' technology converts rural virgin cellulosic biomass feedstocks into syngas.

In addition to the 25 percent ownership interest in ClearFuels, Rentech said it has agreed to the installation of a ClearFuels biomass gasifier at the its Product Demonstration Unit (PDU), in Commerce City, CO. That facility is designed to produce more than 400 gallons per day of synthetic jet fuel, aviation fuel, ultra-low sulfur diesel, and specialty waxes and chemicals and is scalable for increased output.

The deal with ClearFuels also includes multiple licensing agreements for the Rentech's Fischer-Tropsch Process at bio-energy facilities currently under development by ClearFuels.

With the SilvaGas acquisition, Rentech is acquiring a biomass gasification technology that has operated at commercial scale and is planned for deployment at Rentech’s Rialto Renewable Energy Center under a licensing agreement with SilvaGas. The SilvaGas gasifier can handle urban waste streams that are more varied than the virgin biomass streams that the ClearFuels gasifier has been optimized to convert, the company says.

Meanwhile, ClearFuels’ technology can convert rural virgin biomass feedstocks into syngas that is cleaner and requires less conditioning, leading to "highly efficient conversion into synthetic liquid fuels," it adds.

Integration of these complementary gasification technologies with Rentech’s syngas conditioning and cleanup technology will enable the company to offer integrated packages for renewable fuels and power production.

Rentech says the life-cycle carbon footprint of renewable fuels and power facilities using either type of gasifier gasifier, coupled with the its Fischer-Tropsch Process for synthetic fuels, "can be near zero."

The renewable synthetic diesel and jet fuels produced at these facilities "will meet all applicable fuels standards, be compatible with existing engines and pipelines, and burn cleanly, with emissions of particulates and other regulated pollutants significantly lower than emissions of traditional fuels." In addition, fuels produced from the Fischer-Tropsch process are the only alternative fuel type currently certified for use by the U.S. Air Force and they are in the process of receiving formal certification by the Federal Aviation Administration for use in commercial aircraft.

The renewable fuels produced from biomass using Rentech’s technologies will meet the federally-mandated Renewable Fuels Standard (RFS), it claims. The RFS requires minimum annual levels of renewable fuel production in the U.S. and sets a standard that starts at 9 billion gallons in 2008 and rises to 36 billion gallons by 2022. Of the latter total, 21 billion gallons are required to be obtained from advanced biofuels production.

Rentech’s senior management team will discuss both transactions on June 30 conference at 1:30 p.m. PDT. Callers may listen to the live presentation, which will be followed by a question and answer segment, by dialing 800-935-5014 or 212-231-2900. An audio webcast of the call also will be available at Rentech's website within the Investor Relations portion of the site under the Presentations section.