Effective January 1, 2012, Dynamic Fuels entered into an 18 months agreement with Mansfield Oil Company, the largest fuel supply chain manager in the United States. The arrangement allows Dynamic Fuels to nominate up to 100% of Geismar diesel production and Mansfield is required to take the nominated volumes at posted ULSD and RIN prices less than industry standard fee.
In addition, Dynamic Fuels and Mansfield will market renewable diesel directly to fleet customers. Mansfield has a supply force of approximately 50 people, who call on national fleets, railroad, transit authorities, and other state and local entities. In addition to sales support, Mansfield supplies logistic and back-office operations for sales to all 50 states. Our arrangement with Mansfield provides Dynamic Fuels the flexibility to sell to Mansfield or direct to the customer.
As an example of the corporation between Mansfield and Dynamic Fuels, we announced the first fleet relationship with Norfolk Southern on February 14. Dynamic Fuels is supplying Norfolk Southern already in Mississippi rail yard with approximately 750,000 gallons per month of renewable diesels since early January.
As stated by Norfolk Southern and I quote," Our locomotive engines are completely compatible with the pure renewable diesel provided by Dynamic Fuels and Mansfield."The Norfolk Southern transaction is a perfect example of customers using dropped and renewable diesel fuel while allowing them to achieve their sustainability objectives about sacrificing performance. Dynamic Fuels has completed production of 450,000 gallons of middle distillate for the U.S. Navy. Dynamic Fuels and Solazyme competitively bid and were awarded this contract in November, 2011. Dynamic Fuels shift and invoice to 121,000 gallons in marine diesel from the Geismar plant to Port Orchard, Washington in February. Read the rest of this transcript for free on seekingalpha.com
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