Biodiesel and Ethanol

BP, Verenium Form Cellulosic Ethanol Venture

February 24, 2009

CAMBRIDGE, MA --- BP and Verenium Corp. announced the formation of a 50-50 joint venture to develop and commercialize cellulosic ethanol from non-food feedstocks.

The joint venture company will act as the commercial entity for the deployment of cellulosic ethanol technology being developed and proven under the first phase of the BP-Verenium partnership, announced last August.

Together, the companies have agreed to commit $45 million in funding and assets to the joint venture company. This collaboration is intended to progress the development of one of the nation's first commercial-scale cellulosic ethanol facilities, located in Highlands County, FL, and to create future opportunities for leveraging cellulosic ethanol technologies.

"This collaboration represents a critical next step in positioning Verenium and BP at the forefront of commercializing cellulosic biofuels in the United States," said Carlos A. Riva, president and CEO of Verenium. "The creation of this joint venture brings together innovative and experienced developers, designers, engineers, operators and managers capable of realizing the potential of this technology."

"BP and Verenium together have the technological know-how, engineering capability and market expertise required to demonstrate that we can deliver better, more sustainable biofuels, more quickly," added Sue Ellerbusch, president of BP Biofuels North America.

Highlights of the collaboration include:

-- Formation of a joint venture company with a total commitment of $45 million in funding and assets contributed from BP and Verenium, including a total of $22.5 million from BP and development assets from Verenium, including the Highlands County, FL, project and another commercial project site in early stages of development.

-- The joint venture company will be led and supported by a team of employees from both BP and Verenium and will be governed by a board with equal representation from both parent companies.

-- The joint venture company will initially be based in Cambridge, MA.

The joint venture company will initially focus on developing and securing financing for a commercial-scale cellulosic ethanol facility in Highlands County, FL, and expects to break ground on that site in 2010. The estimated construction cost for this 36 million gallon-per-year facility is between $250 and $300 million.

Production from this plant is expected to begin in 2012. With plans to add additional capacity, the joint venture company also intends to develop a second site in the Gulf Coast region.

"We are striving to move as rapidly as possible because the technology is ready and we know the marketplace is waiting," Riva said. "This process will help fulfil America's renewable fuel mandates, build our nation's domestic infrastructure and create the new green jobs we so badly need."

 

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