Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Michael Molnar - Goldman Sachs.
Michael Molnar - Goldman Sachs
I think you’re using gas as the feedstock for the PDU, is that right?
D. Hunt Ramsbottom
That’s correct.
Michael Molnar - Goldman Sachs
When are you going to, if at all, start using coal and/or biomass? And number two, maybe if you could just elaborate on some of the technical challenges in doing this or is simply financial in getting the equipment up and running?
D. Hunt Ramsbottom
We’re in conversations with multiple, as we mentioned earlier, gas companies and I expect over the course of the next 12 months we’ll have chosen and have selected and put somebody in construction at the site at the PDU.
Michael Molnar - Goldman Sachs
What are some of the technical challenges besides using gas from actually converting a gas line? Do you see that as very limited or are there certain technical challenges.
D. Hunt Ramsbottom
Since I’ve got Dr. Wright here, I don’t so I’ll defer to Dr. Wright for that question.
Dr. Harold A. Wright
Biomass gasification has not been practiced widely on a commercial scale so undoubtedly there will be some challenges with the construction and then the start up of any new technology at the PDU. But that’s of course why we do it at the PDU so we can learn how to do it before we do it commercially.
Michael Molnar - Goldman Sachs
Let’s say I’m a big potential customer that believes in the FT technology. Can you detail what other companies besides Rentech I would be looking at, number one? And then number two, can you detail the metrics that you would use to convince me to use the Rentech process versus someone else? What I’m trying to do is understand why I would finance the Rentech process versus other operations some of which some people would argue are a bit more commercially proven at scale? Maybe if you can walk me through that process?
D. Hunt Ramsbottom
Well I think when I look at the only operating company at scale I think would be [Sasaul] that’s operating at scale and Shell. So I think the question would have to be from a customer’s perspective who you’d want to do business with - Shell, Sasaul or Rentech - and I’ve said this before, I think obviously all very good companies but they all have a very big project pipeline especially Sasaul on a worldwide basis, a huge project pipeline. So I think we would hope that we would convince them with certainly the early findings that we’re getting off our yields and conversion with our exceptional results at the PDU and the fact that I think we could probably be more flexible in our conversations with them than maybe Sasaul or Shell could be and that we could convince them. A lot of it’s going to come down to technical data which I think Harold and the team are, again it’s early on, but extremely confident in the results of the PDU. We’ve got folks out there constantly now looking at the technology, the yields and all the things that have been going on at the PDU. So I think it’s a question of whose attention they think they can get. And certainly we’re new to the market place so we are possibly a little bit hungrier than the others.
- To read the full transcript on Seeking Alpha, click here »
