Lurgi Rides the Biofuel Boom with Multiple Projects and a Future in the $3.6 Billion EU Market Beckoning

---

Researched by Industrialinfo.com (Industrial Information Resources Incorporated; Houston, Texas). Forecasts say that European demand for fuels made from renewable resources could treble by 2010 and the percentage of biofuels in the region’s total fuel mix will rise from the current 2% to 5.75%. This means that all fuels from renewable sources will rise from the current five million tons to fourteen million tons by the end of the first decade of the 21st Century. If we take a nominal conversion rate of 7.5 barrels per ton this means a production increase from 37.5 million to 105 million barrels per annum. These figures are translated by a plant engineering firm like Lurgi into plant investments of about $3.6 billion and could mean 40 new biodiesel plants with a production average of 100,000 tpa and 60 new bioethanol plants with an average annual output of 100,000 tpa each annually by 2010.

In Germany, nearly 2,000 gas stations now offer pure biodiesel, and oil companies are incorporating an additional 5% alternative fuel to traditional diesel. Biodiesel sales in the country are expected to rise by over 33%. Some countries, like Austria, require the addition of biodiesel by law. E.U. sales of biodiesel could reach two million tons per annum by the end of 2006.

In the U.S., where there is strong demand for bioethanol, market observers forecast that bioethanol and biodiesel production will rise to fourteen million tons by 2008, up from 10.6 million tons in 2004. For related news item see January 23, 2006 – US Fuel Ethanol Industry Grows by 29% in 2005 – 2006 Forecast to Exceed

In the last half of 2005, Lurgi AG, a subsidiary of the GEA Group (XETRA:GIAG.DE) (Bochum, Germany), won contracts worth over $240 million for the construction of biodiesel plants, representing an output of one million tons of biodiesel fuel (7.5 milion barrels per annum or over 20,000 bpd). When these plants are complete and operational, the company will be able to claim that almost 70% of global production of biodiesel is running through Lurgi technology, and in Germany the figure will be nearly 80%.

A new $77 million contract for a plant using rapeseed as feedstock was placed with Lurgi in December by Neckermann-Renewable (Bochum). When complete, the site in Piesteritz in Eastern Germany, the plant will be the largest biodiesel production unit in the world with a capacity of 200,000 tons per annum of fuel. Neckerman is owned by Global Alternative Energy, a Fortune Management, Incorporated company.

The plant will be the first to provide an end-to-end production process –from the introduction of the seed and its processing to the pre-pressing and extraction stages and then on to the processing of crude oil and the production of biodiesel. Lurgi will supply all equipment and materials and will commission the plant and train the staff. Neckermann runs biodiesel plants with a total capacity of about 350,000 tons per annum (over 7,000 bpd), making it a major European producer.

Two weeks prior to the announcement of the Neckermann order, Lurgi had won contracts for the construction of another five biodiesel plants in Germany. The contracts, worth $84 million, will be sited in Rostock and Frankfurt. The plants will have a combined capacity of 640,00 tons per annum of biodiesel (over 13,000 bpd) and the two largest units at Frankfurt/Hoechst (for Cargill, Minneapolis) and Rostock (for Biodiesel Rostock) will both have a capacity of 200,000 tpa.

In Texas, Panda Group (Studley, United Kingdom) has signed a $120 million contract with Lurgi for an ethanol producing plant with an annual capacity of 327,000 tons (2.4 million bpa or over 6,500 bpd). The plant will be constructed near the town of Hereford, Texas. Panda is planning a similar plant with Lurgi in Haskell County, Kansas.

In December, the company won a total of $96 million, including a methanol plant feeding propylene plant in China, the biodiesel plants in Europe and a gas synthesis plant in Canada. The Chinese plant represents a technological advance for Lurgi as it is the first use of the methanol-to-propylene (MTP) process developed by Lurgi on an industrial scale. The new plant will produce methanol from gas that has been extracted from coal. Traditionally, propylene has been produced from coal.

Riding on the global boom in alternative fuels, Lurgi is concentrating on building plants to produce biofuels from renewable resources and plants manufacturing petrochemical products such as methanol, plastics and synthetic fuels based on gas.

Industrial Information Resources (IIR) is a Marketing Information Service company that has been doing business for over 22 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.