Texas-based Arabian American Development Co. (ARSD) recently announced a new contract with Gevo to extend its toll processing services of the hydrocarbon processing demonstration plant at its South Hampton Resources (SHR) facility in Silsbee, Texas, and to construct a second demonstration unit to provide Gevo with toll-processing services to manufacture up to 16,000 pounds per month of mixed octane materials produced on the existing bio-isobutanol to jet fuel demonstration unit.

SHR’s Silsbee, Texas, facility

SHR’s first demonstration plant, which was completed in late 2011, can process up to 10,000 gallons per month of Gevo’s isobutanol into a variety of products such as jet fuel, isooctane for gasoline, isooctene and paraxylene for evaluation and product qualification for Gevo’s current and potential customers.

According to ARSD, the new demonstration unit will produce paraxylene for polyethylene terephthalate (PET), so Gevo can supply early adopters with product to test the material, to make samples and start their selling cycle.

Gevo’s customer line-up for isobutanol-based paraxylene include Coca-Cola and Japanese chemical firm Toray.

The contract is for a year and a half with one-year extensions available thereafter. The demonstration plant is expected to be completed in the third quarter of 2013. SHR will incur incidental costs related to site preparations and tie-ins.

The blog has been remiss of posting updates on Gevo. The company announced on March 21 that it has won a patent suit against bio-isobutanol producer Butamax covering patent numbers 7,851,188 and 7,993,889. A trial scheduled for April 1 will no longer take place.

The said patents require the use of an “NADPH-dependent” KARI enzyme and according to Gevo, Butamax conceded that it could not establish that Gevo’s KARI is NADPH-dependent as Gevo is using an “NADH-dependent” KARI enzyme that enables Gevo’s yeast strains to produce isobutanol at much greater efficiencies than using the NADPH-dependent enzymes claimed by Butamax.

Still, the patent is not yet over as Butamax said it plans to appeal the Federal Circuit court, which according to Butamax, “chose a very narrow claim construction for the KARI enzyme element of the claims.”  Both companies are also still fighting over other patents with one trial scheduled to take place in August. Of course that will put a continued strain on Gevo’s cash balance, which was around $67m at the end of 2012.

Gevo has stopped producing corn-based isobutanol (and ethanol) at its 18m gal/year bio-isobutanol (or the equivalent of 22m gal/year bioethanol) facility in Luverne, Minnesota, in the fourth quarter last year, stating the need for technology optimization of the plant and in order to maximize cash flow.

According to Gevo’s earnings conference call last month, the company’s goal this year is to produce consistent quantities and quality of its isobutanol at economically viable rates this year. Gevo said it has produced roughly 150,000 crude isobutanol gallons to carry them over this year for its customers until the company starts up the plant again.

One of its customers is the Department of Defense which ordered late last year 45,000 gallons of of isobutanol-based jet fuel for the Air Force. Gevo said its 150,000 gallons of isobutanol inventory is more than enough to meet their obligations or customer requirements.