Plans to build the state's largest biodiesel refinery at Campbell Industrial Park suffered a blow yesterday when Imperium Renewables Inc. said it was delaying an initial public stock offering that would have provided the financing for the the $91 million plant.

Imperium had hoped to have the 100 million-gallon-a-year facility up and operating by the end of this year, with pipelines ready to supply a Hawaiian Electric Co. generating facility that's to be built nearby.

Imperium has a contract to be the exclusive biodiesel supplier for the HECO plant through 2011. The HECO plant is scheduled to start operation next year and consume between 5 million and 12 million gallons of biodiesel annually.

Imperium, however, said yesterday it was withdrawing its IPO registration because market conditions weren't right for a public offering. The Seattle-based company had filed the statement last May, saying it wanted to raise as much as $345 million to help with the building of plants here, on the Mainland and South America.

The decision to pull the IPO came about two weeks after Imperium CEO and Chairman Martin Tobias stepped down. Tobias had been a technology executive with Loudeye Technologies and Microsoft Corp. The chief executive role is being filled on an interim basis by Imperium President and founder John Plaza, while board member Nancy Floyd is serving as chairwoman. Imperium didn't disclose reasons for the change.

The company is evaluating its next steps and is still planning a Hawai'i plant, said John Williams, a public relations consultant to Imperium.

"We remain committed to our goal of building a biodiesel production facility in Hawai'i," Imperium said in a statement e-mailed by Williams. The company said it has worked to get permits that allow it to begin construction on 11 acres leased from from the state Department of Transportation at Kalaeloa Harbor.

"We are currently working on the groundbreaking schedule and we will communicate that schedule at the appropriate time."

HECO IN CONTACT

HECO yesterday said it was aware of Imperium's IPO delay and has been in contact with the company.

"We're committed to biofuel at our new generating plant at Campbell Industrial Park and this news doesn't impact those plans at all," said HECO spokesman Darren Pai.

"Right now it's too premature to get into what-ifs."

Imperium's biodiesel plant would help the state cut down its dependency on imported oil and is slated to produce diesel from palm oil and other feedstock.

HECO would be one of its main customers. The utility plans to break ground later this year on its 100-megawatt generating facility that's supposed to run entirely on biofuels.

HELP FROM MAINLAND

As part of the agreement between HECO and Imperium, the Seattle company is to work to promote development of Ha-wai'i's agricultural energy industry to supply Hawai'i-grown feedstock.

A report by the Hawaii Agricultural Research Center has said the state could produce more than 150 million gallons of biodiesel per year from local feedstock. In doing so, the production could supplant about half of the petroleum diesel that's used in the state.

Imperium may be able to satisfy HECO's needs with production from its Grays Harbor, Wash., plant that opened in August. That refinery is capable of producing 100 million gallons of biodiesel annually. The facility is the largest biodiesel plant in the country.

Williams said the company intends to fulfill its contract with HECO and that Imperium is evaluating a range of methods to enable continued project development. Previously, the company raised $214 million of debt and equity funding.

Imperium's e-mailed statement said it has deeply invested in Hawai'i and has worked to establish partnerships.

"We have employees on the ground in Hawai'i and have been working hard to not only move our project forward but do so in a way that takes into account Hawai'i's unique considerations and needs.

"We look forward to providing high-quality fuel for customers in Hawai'i."

Reach Greg Wiles at gwiles@honoluluadvertiser.com.

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