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https://www.bizjournals.com/houston/...Pos=8#cxrecs_s

World Energy seeks $2B to convert Houston Ship Channel plant to produce sustainable aviation fuel


A developer is seeking a $2 billion federal loan to turn a long-serving biodiesel facility on the Houston Ship Channel into a plant that can produce 250 million gallons of sustainable aviation fuel annually.

Boston-based World Energy was invited this week to apply for the Department of Energy’s Title 17 Clean Energy Financing program to fund the project.

World Energy CEO Gene Gebolys told the Houston Business Journal that the company expects to reach a final investment decision for the project by the end of the year. Construction is expected to begin next year, and the facility is expected to go online in 2027.

Gebolys said the company’s strategy involves selling decarbonization as a service through aviation fuel — an approach that allows World Energy to reach sustainable aviation fuel customers outside of airlines and upset what he describes as a status quo of aviation.

“Airlines will be an important part of this ecosystem — but not the only part,” Gebolys told the Houston Business Journal. "The most important part is the customer that's got people in those airplanes, moving people and products, that enables us to do what we do."

The company could not disclose the footprint of its Galena Park site but said the plant had been producing biodiesel since World Energy acquired it in 2016. The conversion project would be World Energy’s second SAF facility, after the company acquired the former Paramount Petroleum Corp. facility in Paramount, California, and converted that site into an SAF facility.

Part of World Energy’s value calculations also include the capacity to physically move SAF to airports outside of Houston and Texas, including Kansas City International Airport, Denver International Airport and Eppley Airfield in Omaha, Nebraska, through its connection to a Magellan Midstream Partners pipeline.

Gebolys highlighted some of World Energy’s recent customers as examples of potential customers for the converted local facility. The company had already counted companies like Arlington, Virginia-based aircraft giant Boeing Co. (NYSE: BA) and Chicago-based United Airlines Inc. (NYSE: UAL) by 2022, but last October, technology giant Microsoft Corp. (Nasdaq: MSFT) signed a 10-year agreement intended to replace 43.7 million gallons of standard jet fuel with SAF.

“Once we demonstrate the business works, that brings in more investment that enables us to scale up,” Gebolys said. "It's important that we demonstrate that this is a viable alternative to the status quo of aviation."

The Microsoft contract will take its fuel from the Paramount facility. Gebolys said customer announcements for the Ship Channel facility would come closer to construction.