OriginOil receives first commercial order for algae system

By Erin Voegele | January 31, 2011

California-based OriginOil Inc. has received the first commercial order to deploy its algae oil extraction system in an industrial setting. Australia-based MBD Energy Ltd. has committed to purchase an initial OriginOil extraction unit for piloting at Queensland’s Tarong Power Station, a coal-fired power plant.

According to OriginOil CEO Riggs Eckelberry, his company delivered a similar system to MBD in 2010 for use at its research facility at James Cook University. “That one was capable of processing five gallons per minute of algae culture,” he said. “This [new] unit has similar capacity.”

MBD is building a one-hectare (2.47-acre) proof-of-concept plant at the Tarong Power Station, Eckelberry said. The project will source carbon dioxide (CO2) from the power plant’s flue gas emissions to aid in algae cultivation.

“The device we have a [purchase order (PO)] for now is what you could call a starter unit,” Eckelberry said. “It’s really to enable testing. As the one-acre site is being built, there will be early construction and testing of the process. This is the first time they are pulling CO2 from a power plant, so this unit will service that early-stage testing of this proof-of-concept site. Later this year, we anticipate getting an order for the full one-hectare system, which will be able to process 300 gallons per minute, so 50 times more capacity and that will serve the entire one-hectare setup.”

The proof-of-concept site will be developed in three stages. Stage one will be completed during the second quarter of 2011, and will include delivery and operation of OriginOil’s starter unit. In the second stage, the full one-hectare site will be built out. The third stage, scheduled for the fourth quarter of 2011, will include full operational capacity of the one-hectare site. This is anticipated to include the PO for OriginOil’s larger extraction device. Once that device is in place, Eckelberry said the smaller starter unit can then be redeployed at MBD’s next algae production site, likely another power plant.

OriginOil’s extraction technology features three primary elements. Electromagnetic pulsing is used to fracture the algae. The system also uses ultrasound technology in a mixer to release the oils. It is also sometimes necessary to alter the pH of the culture. “The process is extremely variable because we have found that algae strains themselves have tremendous variation and require different sorts of recipes,” Eckelberry said. “The different elements are pH modification, applying ultrasound, and electromagnetic pulsing in various different combinations according to the strain.”

In addition to supplying oil extraction equipment to MBD, OriginOil has also formed a developmental agreement with the company. “The agreement we have is a master agreement under which they protect our intellectual property rights for this technology,” Eckelberry said. “As you can guess, if we go deliver something that’s not been tested in the field, there is a lot to be learned. We want to own the learning from that. So, they agreed that everything related to our technology that’s learned there—even if they learn it—is our property.” The two companies have also agreed to have a series of POs under the agreement pertaining to the scale up of MBD’s three proposed algae production sites, Eckelberry continued. OriginOil has also given MBD a two-year exclusive that began in May. “If we sell anything else in Australia in that period, it will be through them,” Eckelberry said.

MBD intends to scale up algae production projects at three Australian sites. Each site is currently expected to comprise 80 hectares (198 acres) of algae production. MBD has stated that OriginOil is its harvesting extraction partner for all of these projects, which is an “extraordinary vote of confidence for us,” Eckelberry said. If all three sites scale up as planned, Eckelberry estimates the projects could potentially bring his company $100 million in revenue.

“OriginOil’s algae harvesting equipment performed extremely well during preconstruction tests at MBD’s R&D facility at James Cook University,” said Andrew Lawson, managing director of MBD. “We have every confidence that OriginOil’s algae oil extraction technology will meet our high expectations for the next stage."

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