BP and Verenium team up to produce biofuels

LONDON: European oil major BP PLC said Wednesday it is investing US$90 million in US biofuels producer Verenium Corp. to form a partnership aimed at developing and commercializing next-generation biofuels.

BP - Europe's second biggest oil producer behind Royal Dutch Shell PLC - said it would invest the money over the next 18 months for rights to current and future technology held within the partnership.

BP hopes the partnership will speed up the development of cellulosic ethanol via facilities in the United States. Cellulosic ethanol is a next-generation biofuel made from nonfood biomass sources.

Verenium began operating the first US cellulosic ethanol demonstration-scale plant in Louisiana earlier this year.
``We believe energy crops like sugar cane, miscanthus and energy cane are the best feedstocks to deliver economic, sustainable and scaleable biofuels to the world,'' said Sue Ellerbusch, president of BP Biofuels North America. ``This deal puts us at the front of the cellulosic biofuels game.''

To create the alliance, the two companies have formed a Special Purpose Entity that is equally owned by BP and Verenium and will license existing intellectual property from each company and own jointly developed intellectual property in the field of cellulosic ethanol production.

All intellectual property owned prior to the formation of the SPE will be retained by each respective company.