Startup biofuel company KiOR has agreed to sell its synthetic crude oil to a Tuscaloosa refinery, freeing up $75 million in state loans.
The deal with the Tuscaloosa-based Hunt Refining Co. secures a source of income for the Pasadena, Texas-based KiOR, which has already begun construction on its Columbus plant.
Although the details of the contract remained unclear, a KiOR spokesman said Hunt will buy some of the 11 million gallons of renewable gasoline and diesel fuel produced annually by the Columbus plant, the first of three in the state. The companies have also agreed to share information and resources.
“We”re excited to partner with Hunt to bring our renewable fuels to market and begin reducing the country”s dependence on foreign oil while creating quality jobs and economic development throughout the state of Mississippi,” KiOR President and CEO Fred Cannon said in a statement released Tuesday.
KiOR has already invested about $150 million in the Columbus plant, which will turn wood chips into oil when finished.
Because of state restrictions, the biofuel company couldn”t access $75 million in state loans until it provided proof of a contract with a refinery.
KiOR could also receive $1 billion in federal loan guarantees to build its two other plants in Newton and a third unnamed site in southwest Mississippi.
The company already agreed in August to invest $500 million of its own money to building the refineries, creating an estimated 1,000 jobs, including 50 in Columbus.
Hunt Refining, which was founded in 1946 and has refineries in Alabama and Mississippi, will refine the fuel blend produced by KiOR for public use. Hunt, a company managed and operated by the Ray L. Hunt family of Dallas, already provides gasoline, diesel and jet fuel to customers throughout the region.
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