Nebraska-based ethanol producer Green Plains says it will buy an ethanol refinery in Texas owned by fuel retailer Murphy USA. This news release from Green Plains says it will pay Hereford Renewable Energy, LLC approximately $93.8 million, including $78.5 million for the ethanol production facility with the balance for working capital.
The facility is a Lurgi-designed, ICM-modified ethanol plant with approximately 100 million gallons per year of production capacity, a corn oil extraction system and other related assets.
“The Hereford facility has many strategic and financial advantages over other destination plants because of its location, leading to both export and domestic market opportunities for ethanol and distillers grains,” commented Todd Becker, president and chief executive officer of Green Plains. “Because it is located near the largest concentration of cattle in the world, with over a million head of cattle fed within a 50-mile radius, the plant can produce a low carbon intensity fuel which is typically sold for a premium to ethanol produced at most other plants.”
Andrew Clyde, president and CEO of Murphy USA, added, “The Hereford facility has become a high-performing facility and we want to recognize the commitment of the Hereford employees who executed the two-year turnaround plan and established a track record of consistent, strong performance. Their commitment created the opportunity for us to attract a prominent, long-term focused buyer such as Green Plains who can build on the progress demonstrated to date at Hereford. This transaction reinforces Murphy USA’s strategic intent of selling our non-core assets in a manner that captures the most value for our shareholders.”
The facility uses a shuttle unload technique that can unload 40,000 bushels of corn per hour, a double-loop track that holds two unit trains at a time and a grain handling system with more than 4.8 million bushels of storage. The plant also has 4.5 million gallons of ethanol storage capacity.