Kior lands state loan to make 'biocrude' from wood

Biofuel company Kior gets $75 million loan from Mississippi to scale up its catalyst-based process for turning biomass into gasoline or diesel fuel.

Biofuel company Kior said on Monday it has secured a $75 million loan to build five plants in Mississippi that will convert wood chips into a petroleum replacement.

The Pasadena, Texas-based company expects to build three of five planned facilities over the next five years. The package from the state also includes state assistance on infrastructure and worker training.

In a debate last Friday, Mississippi state legislators were concerned about the company's ability to make its "biocrude" at competitive costs if oil prices go down further but were convinced by the process, according to an article in the Northeast Mississippi Daily Journal.

Kior's process uses a catalyst to treat biomass to turn it into a petroleum replacement. The proprietary catalyst is recuperated during the production process.

Kior stands out from many biofuels companies in that it is making a petroleum replacement, rather than ethanol. That means its product, which it is now making at a demonstration plant in Texas, can be shipped in pipelines and treated in existing refineries to make gasoline or diesel equivalents.

Its technology uses a priority catalyst in a fluid catalytic cracking process to convert biomass, such as woodchips or agriculture residue, into a petroleum replacement. The process also yields gases that can be burned to make electricity to power the equipment.

The company, which is backed by Khosla Ventures, raised $110 million to scale up its operation earlier this summer.

There are a number of companies pursuing technologies to make liquid fuels from non-food biomass, but none have been able to make their product at commercial scale yet. Kior did not say how much fuel it hopes to produce but said that the investment in Mississippi will total $500 million over five years and result in 1,000 jobs.

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