USA BioEnergy, the developer of a 34 million gallons per year SAF refinery near Bon Wier, Texas, is raising development capital to reach FID on the project, according to a company executive.
The project, which has a 20-year contract with Southwest Airlines, is expected to cost roughly $2.4bn, financed with a 60/40 split between debt and equity.
To reach FID, the company needs development capital investment of $85m, the executive said. Citi had been working with the company but the process is now being run internally.
USA Bioenergy is flexible on structure, the executive said. Ideally the company would like equity inputs from service providers and offtakers, which has been difficult to solicit.
“We went out and we got the contract with Southwest locked down and we’re still sort of figuring out the rest of the details around the project, especially as it relates to CCS,” Casey Keller, the firm’s vice president of commercial strategy, said during a panel discussion at Infocast’s CCS/Decarbonization Summit in Houston.
Under the Southwest deal, the airline plans to begin purchasing SAF from the Bon Wier facility as soon as 2028. The agreement includes a long-term opportunity for Southwest to purchase an additional 180 million gallons of SAF per year from future planned USA BioEnergy production facilities.
For the CCS component of the project, USA BioEnergy might partner with a separate CCS developer to support that piece of infrastructure but also to bring in development capital to the overall SAF/CCS project, Keller said.
“We’re trying to come up with creative solutions to be able to get the entire project built, realizing that that project consists of multiple separate projects that all work together to create the various byproducts,” she said.
She added: “For us, it’s been difficult raising capital. There’s a lot of folks that are interested, quite frankly, only when you get to FID or beyond for projects.”
