HOUSTON-TexCom Inc. has signed development and lease agreements for biodiesel manufacturing plants in Corpus Christi and Seabrook. The combined construction costs will be close to $50 million.
The locally based firm signed development pacts with Puerto Los Caballeros Properties LP in Corpus Christi and LBC Houston LP, which has a Galveston Bay terminal that abuts the Houston Ship Channel. Each partner will kick in $6 million to $9 million toward the projects. TexCom will ante up $15 million for each facility. The plants, to be built on 11.6-acre tracts, will be used to manufacture and distribute soybean oil-based biodiesel fuel.
TexCom plans to break ground on the plants before the year ends. They are to be fully operational by the end of 2006 or early 2007. Once completed, each plant will generate 30 million gallons per year of biodiesel fuel.
TexCom signed 15-year leases, renewable every five years, for the sites. "They [Puerto Los Caballeros and LBC Houston] will actually own the land and will finance the build-outs. We, in turn, will pay the lease on it. That way we can minimize our capital expenditure," says Bill Pettinati, vice president of business development with TexCom. "If we were to build it, from soup to nuts, it would run us somewhere around $25 million to $28 million per facility." Lease costs on the deals were not disclosed.
While these two locations will be the first to see development, Pettinati tells GlobeSt.com that there is likely to be similar partnerships in the future. "We saw that two years ago, there was an opportunity in the biodiesel market," he says, "and it's become more apparent recently that this is a good place to be in as there's a demand for renewable energy." TexCom is in the process of securing financing to cover its contribution, the biodiesel process units.
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