Tyson and Syntroleum Approve Dynamic Fuels Plant Construction
GEISMAR, LA – July 2008 — Tyson Foods (NYSE: TSN) and Syntroleum Corporation (NASDAQ: SYNM) have given final approval for plans to build and fund Dynamic Fuels’ first renewable synthetic fuels facility in Geismar, Louisiana. The sanctioning decision, announced today, means both companies have committed to construction of the Geismar facility.
Dynamic Fuels is a 50:50 venture between Tyson and Syntroleum to convert low grade, inedible fats and greases into renewable transportation fuels for the military and civilian markets.
In conjunction with plant approval, Tyson and Syntroleum have approved the project budget of $138 million. Capital funding includes $100 million in GO Zone Bonds previously approved by the Louisiana State Bond Commission. The balance of $38 million will be funded through equity contributions in the form of cash commitments of $19 million per owner, $13.25 million of which each owner delivered to Dynamic Fuels on July 11.
Construction of Dynamic Fuels initial refinery remains on schedule. Construction is expected to begin in October, and mechanical completion of the plant is expected by year end 2009. Prior to plant sanction, Dynamic Fuels placed orders for long lead time equipment, thereby locking in pricing and securing delivery times consistent with the overall project schedule.
“Approval to construct and fund the Geismar plant is a huge milestone for Dynamic Fuels, reflecting an outstanding effort by the Dynamic Fuels team to complete basic engineering and advance the project,” said Jeff Bigger, senior vice president of business development for Syntroleum. “With this approval we maintain our original project schedule and budget for the Geismar facility.”
Jeff Webster, senior vice president of Tyson’s Renewable Products Division, said, “We’re pleased to move forward on this important renewable fuels project. Tyson is committed to producing next-generation renewable fuels using non-food grade feedstocks, and the Dynamic Fuels venture is an important part of this corporate objective"
Once in operation, the Geismar plant is expected to produce about 75 million gallons of renewable synthetic fuel annually. The fuel produced by the venture will offer the same benefits of synthetic fuels derived from coal or natural gas while providing substantial performance and environmental advantages over petroleum-based fuels. These benefits include higher cetane levels, which are a measure of combustion quality, and superior thermal stability, making it effective for advanced military applications. In addition, replacing traditional petroleum fuel with this fuel substantially reduces total greenhouse gas emissions.
Unlike the ethanol and bio-diesel industries, which use food ingredients such as corn and soybeans to produce fuel, the Dynamic Fuels project will use various non-food grade animal fats produced or procured by Tyson Foods, such as beef tallow, pork lard, chicken fat and greases.
Forward Looking Statements
This document includes forward-looking statements as well as historical information. These forward-looking statements may include statements relating to costs, timing and production of the fuel plant; job creation from plant; and fuel characteristics, benefits and uses.
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