Algae Int'l Group, Gulf Hydrocarbon sign distribution contract

Algae International Group Inc. and Gulf Hydrocarbon Inc. have signed an agreement for Gulf Hydrocarbon to exclusively represent Algae International Group in sales and distribution of its proprietary and nonproprietary algal oils and products created with the algal oils. The exclusive representation agreement takes effect immediately and is a precursor to Algae International Group’s commercial production of algal oils from its pilot facility located in Tulare, Calif.

Gulf Hydrocarbon will distribute and sell Algae International Group’s algal oils for further processing into fuels and all its products made with the algal oils, as well as ancillary products of gaseous fuels and electric power.

Algae International Group advises that it will start the relationship with Gulf Hydrocarbon by shipping samples of proprietary and nonproprietary algal oils for testing as feedstocks for biodiesel. Jess Hewitt, chairman of Gulf Hydrocarbon, said, “Algae oils were approved by the U.S. EPA for use as a biodiesel feedstock in 2010 but we have yet to see the feedstock available. By shipping samples to the biodiesel producers, we can begin the process of registering the numerous production plants with the EPA.”

As a part of the agreement, Gulf Hydrocarbon will offer standard biodiesel reference fuels made using Algae International Group’s output from its pilot facility. “In order to satisfy the OEM’s requirements for engine and material compatibility, we must be able to supply a standard reference fuel before the engine manufacturers can certify use of the algal-based biodiesel in vehicle and nonroad engines,” Hewitt said. “Gulf Hydrocarbon will be responsible for quality control and packaging of these fuels for distribution to fuel laboratories and OEM testing facilities.”

In addition to the representation of Algae International Group’s oil and related products, Gulf Hydrocarbon will also represent Algae International Group for the sale and distribution of excess biogas and the other products created with the excess biogas. These products will meet the latest proposed pathways for landfill and biogas for the renewable fuel standard. Gulf Hydrocarbon will also market any renewable identification numbers (RINs) Algae International Group generates. The RINs have a current value of $9/MMBtu, which will contribute greatly to the revenue stream from Algae International Group’s operations.

Algae International Group plans to be involved in the development of the propagation of specific algae species, for the extraction of oils and other valuable lipids and products, for a variety of industries ranging from biodiesel and jet fuel, fuel additives, lubricants, pharmaceuticals, nutritional products and even cosmetics.