PetroSun announces algae-to-biodiesel advances

By Jerry W. Kram | October 16, 2007
PetroSun Inc. is moving forward with its algae-to-biodiesel production plans. The company held an invitation-only demonstration of its algae-to-biodiesel system in Auburn and Opelika, Ala., in early August, and more demonstration meetings are planned.

"The purpose of these meetings is to demonstrate to potential customers that algal oil is a commercially viable alternative feedstock for the biodiesel industry," said PetroSun CEO Gordon LeBlanc Jr. "The company intends to hold a series of these programs during August and September with biodiesel refiners and firms that are researching the use of algal oil as a potential feedstock for jet fuel production."

PetroSun has announced plans to build algae farms and oil extraction plants in Alabama, Louisiana, California, Mexico and Australia. The company plans to extract oil from algae for sale to existing biodiesel refiners. The company's three-year plan calls for a production capacity of 2.56 billion gallons per year. Potential revenue at that level of production is more than $4 billion, according to the company. Current biodiesel production capacity in the United States is approximately 2.5 billion gallons per year.

The company has established a preliminary wholesale market price for algae oil based on crude oil market prices. For example, at $72 per barrel of crude oil, the market price for the company's algal oil will be $1.71 per gallon, compared with a market price of $2.81 per gallon for soybean oil.

PetroSun has completed an agreement with Grupo Santa Maria to provide consulting for its initial production facilities in Mexico. PetroSun established a biofuels subsidiary in Mexico in August. The two companies will focus their initial efforts in the state of Sonora, identifying sites for algae farms and extraction plants near the cities of Hermosillo, Guaymas and Puerto Peñasco.

The company is also entering the South American biofuels market, establishing PetroSun Brazil in early September. PetroSun Brazil will enter into joint venture agreements to develop algae cultivation farms and extraction plants in that country, the company announced. Brazil has enacted legislation to require a 2 percent biodiesel-blended product effective Jan. 1, 2008. The requirement will increase to 5 percent in 2013.
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