Solazyme
to supply algae oil to Imperium
By Dallas Kachan, inside greentech
June 6, 2007
In answer to a public challenge six months ago, biotech company
Solazyme is to announce a deal today to start supplying oil derived
from algae feedstock to biodiesel maker Imperium Renewables. Solazyme
has entered into a biodiesel feedstock development agreement under
which Solazyme is to generate algal oil for Imperium’s biodiesel
production process. Under the agreement, Solazyme is to grow
proprietary strains of microalgae, extract the oil, and deliver it to
Imperium, which then intends to convert it into fuel.
Industry observers haven't expected any company to be in a position to
provide meaningful commercial quantities of algal oils in the near
future, given difficulties in cultivating the right strains of algae
and the challenge of extracting oil from it cost-effectively.
But Solazyme co-founder Jonathan Wolfson, president and chief operating
officer, told Inside Greentech that his traditionally "media-shy"
company is farther along than many might think. "Our technology is
advanced enough that we're producing the kinds of quantities that were
interesting to do a deal with. We'll be delivering agreed-upon
quantities [to Imperium] this year." Wolfson wouldn't clarify exactly
what those quantities would be, however.
He did say that beyond the Imperium relationship, Solazyme expected to
hold public demonstration projects this year, showing fuel made from
its algal oil powering an internal combustion engine.
Speaking at an event last December with companies pursuing algae oil
for biofuels, Imperium CEO Martin Tobias said, in front of hundreds of
investors, that he'd "buy 1,000,000 gallons of algae oil today if
anyone here on the panel can deliver it." (see Inside Greentech's
Biofuel from algae on horizon, say experts.)
At that time, nobody on the panel, which included leading algae
companies LiveFuels and GreenFuel Technologies, made commitments.
Why not? Getting oil out of algae cost effectively has turned out to be
difficult.
Government researchers experimenting with algae oil extraction have
been using centrifuges, which have been expensive and scale poorly.
Front-running well funded commercial developers—which, in addition to
LiveFuels and GreenFuel, also include Solix Biofuels and Aurora
BioFuels—are investigating other techniques.
When asked about Solazyme's extraction process, Wolfson was coy.
"I think we're probably going to keep that under wraps for a while.
This is a pretty competitive space. There's certainly money going in,
as you know. You can file for intellectual property six ways to Sunday,
but there are some things that you should keep private as long as
possible."
"I can tell you we've spent a couple of years developing technology
around extraction."
Wolfson made it clear that Solazyme does not feel it is at
commercialization economics with the technology yet, but said the
company is a lot closer than many people believe algae is currently.
"I won't tell you that the economics of extraction are exactly where we
want them to be in the long run, but we've made giant strides to get a
point where we now feel comfortable that we'll be able to get to the
extraction price per gallon that we think is appropriate."
Imperium Renewables has submitted an S-1 filing to the Securities and
Exchange Commission, announcing its intention to become publicly
traded, and, as a result, is now in a quiet period.
Founded in 2003 and headquartered in South San Francisco, Solazyme is
focused on the engineering and optimization of algae for production of
biofuels and health and wellness materials. In March, the company
raised a $8m+ Series B, plus $2m of debt. The Roda Group led the
financing, with participation from Harris & Harris and other
undisclosed investors (see Inside Greentech's Another week, another
three Khosla biofuel investments.)
Imperium Renewables currently operates a 5 million gallon per year
biodiesel production facility, but is constructing a 100 million gallon
per year facility in Grays Harbor, Washington, scheduled to open next
month.
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