Valero Signs Another Deal with Algae-based Fuel Firm
May 05, 2010
Valero Energy Corp. (VLO) has inked a joint development pact with Algenol Biofuels Inc. for an undisclosed sum, in its second deal with an algae-based fuel firm, a company spokesman said on Wednesday.
Valero Energy made a "relatively small investment" in a pact with Bonita Springs, Fla.-based Algenol. Algenol Biofuels said the deal calls for sharing of technology and infrastructure for the production and distribution of transportation fuels and chemicals.
Valero also holds an undisclosed stake in Solix, another algae company.
Day said Valero makes investments for future products as part of its research and development effort.
The move comes as Valero recorded a first-quarter profit of $57 million from production of corn-based biofuel, after the Texas-based refining giant moved into the ethanol business last year.
Valero bought seven ethanol plants out of bankruptcy court from VeraSun for $477 million; followed by a second batch of three plants for $270 million, both in 2009.
Now Valero ranks as one of the largest ethanol producers in the U.S., rivaling private Poet LLC and Archer Daniels Midland (ADM) with about 1.1 billion gallons a year in production.
Algenol CEO Paul Woods said the two companies will work on putting algae farms next to refineries to absorb carbon dioxide to make ethanol and chemicals.
The deal with Valero marks Algenol's third major corporate partner after Dow Chemical (DOW) and privately-held gas producer Linde.
Source: Dow Jones Newswires
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