BP and Verenium in biofuels joint venture

By Sheila McNulty in Houston
Published: February 19 2009 00:53

BP and Verenium announced on Wednesday they would form a joint venture in the US to speed up the availability of sustainable biofuels from non-food feedstocks.
In the 50-50 partnership, the companies are extending their existing science and technology partnership with plans to break ground on their first commercial-scale cellulosic ethanol plant by 2010 and start production in 2012. They have agreed to commit $45m in funding and assets to the joint venture company.
The joint venture, based in Cambridge, Massachusetts, will act as the commercial entity for the deployment of technology being developed under the first phase of the BP-Verenium partnership, announced last August. The plant, one of the first commercial-scale cellulosic ethanol facilities in the US, is to be built in Florida.
“This next stage in our relationship with Verenium demonstrates our real commitment to making cellulosic ethanol a reality in the US fuels market in the new term,’’ said Sue Ellerbusch, president of BP Biofuels North America.
BP is one of the world’s biggest oil companies. Verenium is a Cambridge-based cellulosic ethanol developer.
“This collaboration represents a critical next step in positioning Verenium and BP at the forefront of commercialising cellulosic biofuels in the United States,’’ said Carlos Riva, Verenium’s chief executive officer. “This is a true convergence of industrial bio-technology and energy production processes, which will allow us to deliver cleaner, more sustainable fuels.’’
The joint venture company will be comprised of employees from both companies and governed by a board with equal representation. Its initial focus will be on developing and securing financing for the 36m gallon-per-year ethanol facility, which is estimated to cost up to $300m to build.
A second site is planned for the Gulf Coast region.
“This process will help fulfi America’s renewable fuel mandates, build our nation’s domestic infrastructure and create the new green jobs we so badly need,’’ Mr Riva said.
Copyright The Financial Times Limited 2009