Sapphire Energy Signs Deal with Tesoro, Begins Year-Round Production

3/20/13Follow @bvbigelow

San Diego-based Sapphire Energy says today it has agreed to supply crude oil produced from algae at its “Green Crude Farm” near Columbus, NM, under a new commercial agreement with Tesoro, the independent oil company based in San Antonio, TX.

Sapphire says it also has begun year-round production of algae-based crude oil at its New Mexico site, a 300-acre commercial algae production facility also known as an integrated algal bio-refinery. (The company provided the image above, which shows crude oil flowing into a barrel at its energy extraction unit, where algae biomass is processed into crude.)

The company describes its now-continuous algae cultivation and crude oil production as “a new milestone,” and the first step in a commercial relationship to process “green crude.”

“This moment is enormously important for the industry as it validates the benefits and advantages of green crude, and confirms its place as a market-viable, refiner-ready, renewable crude oil solution,” Sapphire Energy chairman and CEO Cynthia “C.J.” Warner says in a statement released today.

The first phase of Sapphire’s algae farm became operational in mid-2012, producing 81 tons of algal biomass less than two months later as part of a commercial demonstration project. Warner said Sapphire started algae production, produced crude oil, and signed Tesoro as its first customer in less than a year. Tesoro (NYSE: TSO) is a Fortune 150 company that reported nearly $32.5 billion in revenue last year.

Sapphire also says it has developed a new process for extracting crude oil from wet algae, avoiding a time-consuming and costly drying step. Sapphire says its patented process uses the entire algae cell, which improves yield, will work in large-scale production, and can be used with a wide variety of algae strains.

Sapphire said it plans to increase its production significantly as it moves towards commercial-scale production.

 

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

By posting a comment, you agree to our terms and conditions.