The renewable fuels and chemicals manufacturer also said it has about 6-7 million gallons per year (MGPY) of offtake under contract out of its planned minimum sized 10MGPY hydrocarbon plant, up from about 5MGPY.
“We continued to make progress on our plans," said CEO Dr Patrick Gruber in a statement. “We have over 60MGPY of jet fuel and isooctane in contract negotiation, and well over 120MGPY in total under discussion. We only need to secure 5MGPY more to achieve our threshold offtake of 10MGPY which should allow us to be able to build a larger plant with acceptable economies of scale.”
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Revenue for the 3Q that ended September 30 was $6.1 million, compared with $8.6 million in the same period of 2018. During the 3Q, revenue derived at the Luverne Facility related to ethanol sales and related products was $5.6 million, a decrease of approximately $2.5 million from the same period in 2018.
Gross loss was $3.8 million, versus a $2.1 million gross loss in the same period in 2018. Gevo Incurred a net loss of $8.6 million, compared with a net loss of $6.9 million in the year-ago quarter.
Gevo said it believes it can become profitable (or close to it) by the end of 2021 if it can successfully improve the carbon footprint of its Luverne facility by implementing certain wind and renewable natural gas projects to offset the fossil-based electricity and natural gas that currently powers the facility.
The lower carbon footprint would allow Gevo to sell low-carbon ethanol into the California market under the Low Carbon Fuel Standard. In addition, Gevo expects to deploy a 1MGPY hydrocarbon plant at the Luverne facility that will produce renewable jet fuel and isooctane to be sold into California and European markets.
The 1MGPY hydrocarbon plant should not only generate attractive positive cash flow, but should produce products that help to establish supply chains that could in the future accommodate quantities that are orders of magnitude greater.
The timeline for the 1MGPY hydrocarbon plant coming on-line is expected to be about 12 months after Gevo has secured financing. The company expects one or more of its renewable natural gas projects that are under development to come online by the end of 2020 or early 2021.
In parallel, Gevo is working to secure the customer offtake agreements and financing to accomplish the growth plans for the Luverne facility. This phase of growth is expected to initially result in about 10-30 MGPY of isooctane and jet fuel, and if successful would be expected to generate revenues of over $100 million to $200 million per year.
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