Project Overview
BP had previously shut down its biofuels demonstration and pilot facility in Jennings, Louisiana after the technology was proven but the business case did not support continuing the operation. The facility occupied more than 100 acres and included the real estate, buildings, process equipment, and other assets across the site.
Phoenix Equipment, together with two partner companies, purchased the entire site in as-is, where-is condition. The transaction gave BP a straightforward exit from the property while transferring responsibility for the real estate, taxes, security, and ongoing site ownership to the buyers.
The approximately $3 million project combined full-site acquisition, equipment liquidation, dismantlement, and eventual real estate reuse.
The Challenge
Unlike a conventional equipment purchase, the acquisition included the entire property and everything on it. Phoenix and its partners assumed the ongoing cost and responsibility of owning a large industrial site, including taxes and security, while determining how best to recover value from the process assets and land. Site security became a significant ongoing expense, and the economics depended on recovering enough value from the equipment and real estate to support the acquisition.
Private-Treaty Equipment Liquidation
Phoenix elected to dismantle the process facility and sell the equipment individually through a 12-month private-treaty liquidation.
The former biofuels facility included a 1.4 million gallon/year lignocellulosic ethanol demonstration plant and pilot plant, with equipment associated with feedstock handling and preparation, hydrolysis, liquefaction, fermentation, and other supporting process operations. Major equipment offered for sale included large stainless steel reactors and fermenters, heat exchangers, screw presses, separation equipment, and wastewater-treatment systems.
More than 150 pieces of machinery were ultimately liquidated, allowing Phoenix and its partners to recover value from the process assets rather than treating the site strictly as a demolition project.
Site Reuse
Phoenix was not contractually required to dismantle the plant as part of the BP transaction. After acquiring the property, the ownership group chose to dismantle the plant and sell the equipment individually to recover value from the site.
Once the equipment liquidation and dismantlement progressed, the underlying property was sold for reuse as a trucking depot, giving the former industrial site a new commercial purpose.
Project Highlights
- Client: BP
- Location: Jennings, Louisiana
- Facility: Biofuels Demonstration and Pilot Plant
- Site Size: More Than 100 Acres
- Acquisition: Entire Site, Including Real Estate, Buildings, Process Equipment and Other On-Site Assets
- Transaction Structure: As-Is, Where-Is Full-Site Acquisition
- Phoenix Scope: Site Acquisition, Asset Liquidation, Dismantlement, Security and Real Estate Sale
- Equipment Liquidated: More Than 150 Pieces (See Liquidation)
- Sales Method: 12-Month Private-Treaty Liquidation
- Major Ownership Challenge: Site Security and Carrying Costs
- Project Value: Approximately $3 Million
- Final Site Use: Property Sold for Reuse as a Trucking Depot
- BP Outcome: Entire Facility and Property Disposed of Through a Single Transaction
Creating Value From Both the Equipment and the Property
BP was able to transfer the entire Jennings property in one transaction rather than separately managing equipment sales, carrying costs, security, and real estate disposition. Phoenix and its partners then created value from both sides of the acquisition: the process equipment through private-treaty liquidation and the property through its eventual sale for reuse as a trucking depot.