Houston and Maumee, Ohio-Marathon Oil Corp. and The Andersons Inc. jointly announced July 10 that the companies have signed a letter of intent that could lead to the formation of a 50/50 joint venture that would construct and operate a number of ethanol plants. The formation of the joint venture and other related activities are subject to approval by each company’s board of directors and the execution of definitive agreements. “We are pleased to be partnering with Marathon in the pursuit of ethanol as an alternative fuel source,” says The Andersons President and CEO Mike Anderson. “We believe our strategic relationship is a natural extension of both of the companies’ rich histories in our respective industries. The Andersons has a strong tradition of service in grain markets, and recently has begun construction, management and development of ethanol plants. Marathon represents years of petroleum refining and distribution experience. Additionally, both companies have strategic interests in ethanol production and similar philosophies regarding the impact ethanol will have on American consumers and our environment.” The Andersons will provide day-to-day management of the ethanol plants, as well as corn origination, risk management, and dry distillers grain and ethanol marketing services. Site selection is expected to be finalized soon. The initial plant is expected to have a nameplate annual production capacity of 110 million gallons of ethanol. Timing of construction is contingent upon selection, regulatory requirements, permitting, and economic incentives. In other news, The Andersons said it has submitted the appropriate requests for an air permit in preparation for a potential ethanol plant to be constructed in Greenville, Ohio. The company has an option to purchase land in an industrial park in this Southwestern Ohio community. If the project goes forward, this facility would produce 110 million gallons of ethanol annually and would be the first fuel ethanol production plant in Ohio. Depending on timing, the facility could be operational as soon as the first quarter of 2008. The project is subject to approval by The Andersons board of directors. Currently, The Andersons is the largest individual investor in two ethanol facilities under construction that, when completed, will have the capacity to produce 165 million gallons of ethanol annually. The Andersons Albion Ethanol LLC is scheduled for completion in August. The Andersons Clymers Ethanol LLC is scheduled to be completed in the first quarter of 2007.
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