BP (NYSE: BP) and Verenium Corporation (Nasdaq: VRNM) have formed a strategic partnership to accelerate the development and commercialization of cellulosic ethanol.
Under the initial phase of the 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.
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.
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.
Sue Ellerbusch, president of BP Biofuels North America, said, "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."
About Verenium
Verenium Corporation is a leader in the development and commercialization of next-generation cellulosic ethanol, an environmentally-friendly and renewable transportation fuel, as well as high-performance specialty enzymes for applications within the alternative fuels, specialty industrial processes, and animal nutrition and health markets. The Company possesses integrated, end-to-end capabilities in pre-treatment, novel enzyme development, fermentation, engineering, and project development and is moving rapidly to commercialize its proprietary technology for the production of ethanol from a wide array of cellulosic feedstocks, including dedicated energy crops, sugarcane bagasse, agricultural waste, and wood products.
About BP
BP is of one of the world’s largest energy companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items. It is the largest oil and gas producer in the U.S. and one of the largest refiners. BP also has a global network of around 25,000 service stations.
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