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Xethanol Corporation (AMEX:XNL) announced Thursday that it will construct a 50 million gallon per year cellulosic ethanol plant, scheduled for operation by mid 2007, on the site it previously announced that it is acquiring from Pfizer pharmaceutical in Augusta, Georgia.

It is being designed to run on a variety of feedstocks and they have begun securing the necessary feedstock streams from the forest products industry so that they can run at capacity when they begin production by mid-2007. By combining Xethanol's proprietary technologies with those of PRAJ, they believe that they have achieved their goal of being a low-cost producer of fuel ethanol from cellulosic materials.

The Pfizer site has has millions of dollars in equipment and infrastructure in place and ready to use for ethanol production. This enables the company to save significant time and money in bringing their facilities on line. The Pfizer, 40 acre site includes: an 89,100 square foot manufacturing facility, a 25,000 square foot warehouse facility, 7,300 square feet of laboratory space, and 16,000 square feet of offices and conference rooms. This biomass-to-ethanol facility will be the first of its kind in the region. In addition, CoastalXethanol may produce biodiesel in this facility under Xethanol's sublicense from H2Diesel, Inc.

PRAJ Technology, an India based world leader in bio-ethanol technology will provide detailed engineering services, process design and licensing as well as the supply of vital sections of the process plant. PRAJ was also selected to provide the same services for Xethanol's recently announced new 35 million gallon per year facility at its Blairstown, Iowa site.

The Facility Group of Atlanta, Georgia has been retained by the company to act as EPC (Engineering, Procurement and Construction) contractor for the new plant.

Xethanol's proprietary technologies, acquired from the government, industry, leading universities and U.S. Government agencies such as the U.S. Forestry Products Laboratory in Madison, WI, are designed to enable Xethanol to produce ethanol and valuable co-products using biomass waste feedstocks. These technologies include:

* DDS USA and Xethanol have entered into an exclusive marketing and license agreement for its patented dry disaggregation technology to extract materials from agricultural commodities including corn and cellulosic biomass to be used as ethanol production feedstock. It appears that they are not using this process in their current activities.
* It has an ongoing program with NREL for clean separation of biomass into its constituent fractions to reduce fermentation time and decrease the energy costs in the ethanol production process.
* In June 2004, Xethanol acquired Advanced Bioethanol Technologies, Inc. and the exclusive worldwide license to an innovative biomass extraction and fermentation process developed by researchers at Virginia Tech. This technology may be used to convert biomass to ethanol and xylitol. It is being scaled-up to commercial production at Virgina Tech before transfer to Iowa for full production, which was projected for Q3, 2005. In addition it has an ongoing research alliance with Virginia Tech to investigate the effict of newly developde enzymes on feedstocks such as recycled paper sludge, cotton gin mill waste, corn cobs and oat hulls and for steam explosion of biomass.
* They have a Cooperative Research and Development Agreement [CRADA] with Forest Products Laboratory, US Department of Agriculture to engineer genetically modified yeasts that will substantially decrease fermentation time of feedstocks such as xylose in the production of ethanol and/or xylitol, a natural sweetner.
* They have a research agreement with Queens University of Kingston, Ontario, to develop the proces of extractive fermentation with a view to reducing the time required to ferment feedstock by removing ethqanol at an earlier stage than has hitherto been practicable.

They aquired ABGT, who holds the exclusive worldwide license for MicroGasification technology developed at the Energy and Environmental Research Center (EERC) at the University of North Dakota in Grand Forks. The MicroGasifier produces syngas from carbon matter. Syngas drives a portable, power generation system that provides energy solutions for companies and municipalities with simultaneous waste disposal and power needs. This technology provides a lower cost alternative to steam boiler power generation with a small footprint waste-to-energy technology utilizing low-cost biomass feedstocks and waste streams, such as lignin, a byproduct of cellulosic ethanol production. Creating energy from industrial and biomass waste may be cost effective in light of the high cost of oil and natural gas

As part of its growth plans to roll out small footprint ethanol plants regionally, it has organized CoastalXethanol LLC to develop ethanol plants in the Georgia, South Carolina and Jacksonville, Florida region. CoastalXethanol, to be based in Savannah, GA, will focus on a region rich in wood biomass residues from its huge forest products industry.

They own two small ethanol production facilities, where it is deploying these technologies for testing and development .

* Xethanol BioFuels, LLC, Blairstown, Iowa is a dry mill ethanol production facility. New technologies will be tested at the facility enabling results to be examined under real operating conditions.
* The Permeate Refining, Inc. facility in Hopkinton, Iowa is serves as a test and demonstration facility for the various alternative feedstock technologies that Xethanol may acquire. Once a targeted technology has been identified and selected it can be moved from the laboratory to the field by scaling it in this plant for further testing and commercialization.

New 50 Million Gallon Cellulosic Ethanol Facility at Augusta, Georgia Site to Begin Production by Mid 2007, Xethanol press release, July 20, 2006
Xethanol Corporation, New York, NY USA

Source: Xethanol's New Ethanol Plant Leverages Pfizer Investment