GS CleanTech Corp has executed a definitive agreement with an Illinois-based ethanol producer to extract about 12 million gallons of crude corn oil per year from the producer's distillers dried grains for conversion into a biodiesel feedstock using GS CleanTech's corn oil extraction technology.
The patent-pending Corn Oil Extraction Systems have been engineered to help ethanol producers enhance production and increase revenues from their existing crop. GS CleanTech's pricing model for its corn oil extraction technology is based on its provision of turnkey extraction systems for no up-front cost in return for long-term agreements to purchase the extracted corn oil based on a fixed discount to prevailing fuel prices.
Under terms of the new agreement, GS CleanTech will install its Corn Oil Extraction System onsite at two ethanol production facilities where it will generate between $14.0 million and $18.0 million in annual revenues from purchase and sale of the facilities' extracted corn oil as a biodiesel feedstock.
Corn Oil Extraction Systems extract about 3 million gallons of crude corn oil from a typical 50-million-gallon ethanol production facility and enable the ethanol producer to increase its revenues by about 3.5%, or by as much as $4.7 million in new annual sales.
To date, GS CleanTech has executed definitive agreements to extract about 22.5 million gallons of crude corn oil from a number of ethanol facilities. Once the systems are commissioned at each facility, it will purchase and sell the extracted oil as a biodiesel feedstock.
GS CleanTech will sell all its extracted corn oil to GS AgriFuels Corp, its sister company, to convert into biodiesel.