|
Latest
News
November 9, 2009
Oil giant BP has announced that it may begin commercial production of several types of biofuel as early as next year, Reuters reported on Tuesday.
According to Philip New, chief executive of biofuels at BP, the oil company will work with Verenium, a cellulosic ethanol developer, to produce grass-based ethanol in the United States. Cellulosic ethanol is usually made from natural, non-food feedstocks, such as sugarcane bagasse and wood products, and has relatively high oxygen content, making it a convincingly clean alternative to fossil fuels.
BP is also planning to build a biofuel plant in eastern England, to open sometime in 2012. The plant, which is to be constructed in cooperation with British sugar and chemical-manufacturer DuPont, will produce biobutanol, which New describes as an appealing alternative to ethanol. "Biobutanol can provide a door through the blend wall which I would argue is the key structural barrier to the growth of this industry over the next five to 10 years," he said in a presentation at the World Ethanol 2009 conference. BP and DuPont are spending $200 million in a joint research venture to develop biobutanol as cheaply and efficiently as possible. The biobutanol made in BP's British plant would be produced from wheat feedstock; and although burning it would release emissions similar to those of ethanol, the fuel is chemically more similar to gasoline than it is to other biofuels.
To complement its new ethanol and biobutanol plants, BP is spending billions on biofuel research. The company has been eyeing algae as a possible feedstock, largely because algae do not affect fresh water resources, can be produced using ocean and waste-water, and are biodegradable and relatively harmless to the environment if spilled. While algae are expensive to produce, they can yield over 30 times more energy per unit area than other, second-generation biofuel crops. The company is also spending some $1 billion on research on sugar-cane based biofuel in Brazil, which in 2008 produced 37.3% of the world's ethanol-based biofuel.
As is most often the case with Big Oil, there is a bottom line. To compete with fossil fuels, biofuels like ethanol and biobutanol must be produced relatively cheaply, with costs not exceeding $1 per gallon on a volume basis. "If you can't chin that bar, you're not going to be able to compete in the long run," New said, stressing that sugarcane is currently the most cost-efficient biofuel in development. BP joins a growing list of big oil companies pouring billions of dollars into biofuel. As HeatingOil.com reported in September, ExxonMobil has stated its plans to grow green algae to fuel commercial vehicles; Chevron has unveiled the world's largest carbon-sequestration project in Australia; and, in recent months, Valero, Marathon, and Sunoco have all made purchases that put about 7 percent of the U.S. ethanol business in the hands of the oil industry.
-----------------------------
February 20, 2009
BP has this week announced plans to build what it claims will be the world's biggest facility for turning grass into biofuel, shelling out $112.5m investment for a 50 per cent stake in biofuels firm Verenium in the process.
The new facility will build on the company's existing partnership with Verenium, which has seen the two companies build a pilot plant in Louisiana. But the new Florida refinery will be 25 times bigger than the pilot plant, underlining the rapidly expanding interest in cellulosic ethanol, made from inedible plants, such as grass, rather than corn.
Carlos Riva, chief executive of Verenium, hailed the deal as "a critical next step" in the two companies'plans to commercialise cellulosic biofuels, that unlike corn-based biofuels should not have a knock on effect on food supplies and prices.
BP said that the Florida facility cost between $250m and $300m to build, but should produce 36 million gallons per year of fuel once it is operational. Ground will be broken on the site next year, with biofuel production scheduled to begin in 2012.
The joint venture company also intends to develop a second site in the Gulf Coast region.
Sue Ellerbusch, president of BP Biofuels for North America, said that the move underlined the company's commitment to commercialising biofuel in the US.
-----------------
February 18, 2009
CAMBRIDGE, Mass., Feb. 18 /PRNewswire-FirstCall/ -- BP and Verenium Corporation (NASDAQ: VRNM) today announced the formation of a 50-50 joint venture to develop and commercialize cellulosic ethanol from non-food feedstocks. The joint venture company will act as the commercial entity for the deployment of cellulosic ethanol technology being developed and proven under the first phase of the BP-Verenium partnership, announced last August. Together the companies have agreed to commit $45 million in funding and assets to the joint venture company. This collaboration is intended to progress the development of one of the nation's first commercial-scale cellulosic ethanol facilities, located in Highlands County, Florida and to create future opportunities for leveraging cellulosic ethanol technologies.
"This collaboration represents a critical next step in positioning Verenium and BP at the forefront of commercializing cellulosic biofuels in the United States," said Carlos A. Riva, President and Chief Executive Officer of Verenium. "The creation of this joint venture brings together innovative and experienced developers, designers, engineers, operators and managers capable of realizing the potential of this technology. This is a true convergence of industrial biotechnology and energy production processes, which will allow us to deliver cleaner, more sustainable fuels."
"This next stage in our relationship with Verenium demonstrates our real commitment to making cellulosic ethanol a reality in the U.S. fuels market in the near term. BP and Verenium together have the technological know-how, engineering capability and market expertise required to demonstrate that we can deliver better, more sustainable biofuels, more quickly," Sue Ellerbusch, president of BP Biofuels North America said.
Highlights of the collaboration include:
* Formation of a joint venture company with a total commitment of $45 million in funding and assets contributed from BP and Verenium, including a total of $22.5 million from BP and development assets from Verenium, including the Highlands County, Florida project and another commercial project site in early stages of development;
* The joint venture company will be led and supported by a team comprised of employees from both BP and Verenium and will be governed by a board with equal representation from both parent companies; and
* The joint venture company will initially be based in Cambridge, Massachusetts.
The joint venture company will initially focus on developing and securing financing for a first commercial-scale cellulosic ethanol facility in Highlands County, Florida and expects to break ground on that site in 2010. The estimated construction cost for this 36 million gallon-per-year facility is between $250 and $300 million. Production from this plant is expected to begin in 2012. With plans to add additional capacity, the joint venture company also intends to develop a second site in the Gulf Coast region.
"When we say that this partnership is groundbreaking, we mean it both figuratively and literally. We are striving to move as rapidly as possible because the technology is ready and we know the marketplace is waiting," Riva said. "This process will help fulfil America's renewable fuel mandates, build our nation's domestic infrastructure and create the new green jobs we so badly need."
----------------------
CAMBRIDGE, Mass., Aug 06, 2008 /PRNewswire-FirstCall via COMTEX/ -- BP and Verenium Corporation today announced the creation of a strategic partnership to accelerate the development and commercialization of cellulosic ethanol. The partnership combines a broad technology platform and operational capabilities in an effort to advance the development of a portfolio of low-cost, environmentally sound cellulosic ethanol production facilities in the United States, and potentially throughout the world. Under the initial phase of the strategic alliance, Verenium is to receive $90 million in total funding from BP over the next 18 months for rights to current and future technology held within the partnership.
"We are very excited and proud to be partnering with BP, a world leader in both the traditional and alternative energy industries that shares our commitment and vision to rapidly evolve next-generation ethanol into a commercial-scale solution for our energy needs," said Carlos A. Riva, President and Chief Executive Officer at Verenium. "In addition to BP's world-class capabilities in traditional energy production, logistics and distribution, their commitment to accelerate the development of the global biofuels market was a significant factor in our decision to partner with BP. In addition, both organizations are aligned on the significant market opportunity and operational imperatives for achieving rapid, commercial-scale success."
"BP is very pleased to be entering this important relationship with Verenium. We believe energy crops like sugar cane, miscanthus and energy cane are the best feedstocks to deliver economic, sustainable and scaleable biofuels to the world. This deal puts us at the front of the cellulosic biofuels game," said Sue Ellerbusch, president of BP Biofuels North America. "In partnering with Verenium, we now have the most advanced technology for transforming these energy grasses to biofuels, increasing our ability to invest earlier in the US to meet the requirements for cellulosic ethanol laid out in the recent energy bill. We also have the possibility of enhancing the productivity of our Brazilian assets. Verenium has already demonstrated the technology, making this real and an appropriate fit with our commitment to bring more sustainable biofuels to the market more quickly."
The initial phase of the strategic alliance utilizes Verenium's advanced technology for cellulosic ethanol production as the platform for a joint development effort between BP and Verenium. The companies have formed a Special Purpose Entity (SPE) that is equally owned by BP and Verenium, will license existing intellectual property from each company and own jointly-developed intellectual property in the field of cellulosic ethanol production. All intellectual property owned prior to the formation of the SPE will be retained by each respective company. Further, the SPE will serve as the licensing entity to enable all cellulosic ethanol production projects.
The financial terms of this initial phase of the strategic alliance include:
-- $45 million, payable in three installments over the next twelve months, for broad access to Verenium's cellulosic ethanol technology platform, production facilities, and employee scientific knowledge and expertise. At closing, Verenium will receive the first $24.5M of this amount.
-- $2.5 million per month to co-fund Verenium's various scientific and technical initiatives within the cellulosic ethanol field. The Companies'joint efforts in the field will be directed by a Joint Development Agreement, the initial term of which is 18 months.
Beyond the initial phase of this alliance, the companies expect to negotiate a second phase of the relationship focused on the development of a Joint Venture (JV) to accelerate the commercial deployment of the technologies from the SPE into commercial-scale cellulosic ethanol production facilities. While the primary and initial focus of the JV will be on facilities jointly owned by BP and Verenium in the United States, the SPE technologies may also be licensable to third-party commercial projects. It is the Companies'intention to negotiate and finalize this second phase of the strategic alliance, including incremental financial terms for co-funding the JV.
Lazard acted as financial advisor to Verenium in connection with the transaction.
|
