HOUSTON – (BUSINESS WIRE) – Genesis Energy, L.P. (NYSE:GEL) today announced the company plans to invest approximately $300 million to expand its existing Granger production facility to increase soda ash production by approximately 750k tons per year.
“We have a long history of innovation and investment in natural soda ash production in Wyoming. This next phase of our growth will result in Granger joining our Westvaco operation as a world-class soda ash production facility,” said Grant Sims, Chairman and CEO of Genesis. “We look forward to the successful completion of the project, preserving high quality manufacturing jobs in Wyoming and serving our customers with superior quality and supply reliability.” The expansion of the Granger facilities will utilize Genesis’ patented solution feed process technology that has been in utilized at its Westvaco facility since 1995. Following the expansion, we expect the Granger facilities will be one of the lowest cost soda ash production facilities in the world. The increased production will serve growing global soda ash demand and provide supply security to strategic customers.
The construction of the expansion is scheduled to begin in the fourth quarter of 2019. The increased production is anticipated to be available for sale in the second quarter of 2022. During the construction of the expansion, the Granger facility will continue to produce soda ash at current rates.
In conjunction with the expansion, Genesis has entered into agreements with funds affiliated with GSO Capital Partners LP (“GSO”) for the purchase of up to $350 million of preferred interests in an unrestricted subsidiary of Genesis holding Genesis’ alkali business. Proceeds will fund up to 100% of the anticipated cost of the Granger expansion. Preferred holders will receive payment-in-kind in lieu of cash distributions during the anticipated construction period. $55 million of preferred interests will be funded at closing.
Michael Zawadzki, Senior Managing Director and Co-Head of Energy at GSO Capital Partners, stated, “We are delighted to further our existing relationship with Genesis on this exciting opportunity, which adds another strategic asset with strong cash flow characteristics to the Genesis portfolio. We believe the Granger expansion will be highly accretive and will be funded in a balance sheet friendly structure.”