PetroSun signs pact to supply 54 mgy of algae oil to Louisiana biodiesel plant

In Arizona, PetroSun BioFuel announced a letter of intent to supply 54 million gallons of algal oil to a new 54 Mgy Bio-Alternatives biodiesel plant in south Louisiana. Petro Sun announced in August that it would peg its algal oil on a dollar-for-dollar basis with crude oil, which places the value of the contract at $120 million based on a crude oil and algal oil price of $94 per barrel, or $2.19 per gallon. The initial delivery to Bio-Alternatives refinery will be in the third quarter of 2008.

PetroSun previously announced a joint venture in the construction and operation of a 55 Mgy biofuels refinery in Arizona. PetroSun BioFuels will provide the algal oil feedstock, and the resulting biodiesel and ethanol will be distributed in Phoenix.

PetroSun has announced its intention to establish 1,000 algae cultivation pods that will produce up to 2.56 billion gallons of algal oil per year. The announcement highlighted the potential of algae to supply a large percentage of domestic fuel consumption needs within a compact space, even with early-stage yields. PetroSun indicated it would pursue joint ventures with Mexican companies to establish its pods in Sonora state, which is located along the US border south of Arizona.

Last summer, PetroSun completed a successful demonstration of a commercially-viable algae-to-biodiesel conversion in Georgia.

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