BP and Verenium form venture to deliver biofuels

BP and Verenium Corporation 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.

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.