Red Rock Gets Flagship Venture Funding for Oregon Biofuels Plant

(Bloomberg) — Red Rock Biofuels LLC, which signed an
agreement last year to supply fuel to Southwest Airlines Co.,
said Flagship Ventures will invest in its production facility in
Oregon.

The Cambridge, Massachusetts-based private-equity firm will
also advise it on acquiring additional capital needed to begin
construction on the $200 million plant by midyear, Red Rock Co-Founder and Chief Financial Officer Jeff Manternach said in a
telephone interview Monday. The amount of Flagship’s investment
wasn’t disclosed.

Southwest Airlines agreed to buy 3 million gallons of fuel
from Fort Collins, Colorado-based Red Rock, according to the
statement. Red Rock was awarded a $70 million federal grant for
the plant in Lakeview, Oregon, which will take about 18 months
to build and use timber waste to make fuel. Declining oil and
jet-fuel prices haven’t reduced the need for direct biofuel
alternatives, known as drop-ins, Manternach said.

“We see the drop-in jet and diesel markets as being
relatively untouched and demand for those fuels quite high from
airlines and the U.S. military,” he said.

Timber waste will be used to make 12 million to 15 million
gallons of the fuel annually from technology developed by
Velocys Plc, Manternach said. The plant will be funded with a
mix of equity and debt, he said.

“There’s still a lot of abundant forests in the area and
not many competing uses for the wasted woody biomass,”
Manternach said. It will be the first renewable-energy plant
operated by Red Rock, which has built 10 facilities for other
companies.

To contact the reporter on this story:
Justin Doom in New York at
jdoom1@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Tina Davis, Carlos Caminada

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