BP, still mired in the ongoing Gulf oil disaster, has signed a deal to acquire the cellulosic ethanol fuel business of Verenium.
BP said Thursday it will pay $98.3 million in cash for Verenium's technology and ethanol plant in Jennings, La.
Cambridge, Mass.-based Verenium, which has business lines other than ethanol, will retain its commercial enzyme business and its biotech-related research and development.
The Louisiana site, which is a pilot-scale plant as opposed to a commercial-scale one, uses bagasse, the residue from sugar cane processing. The bagasse is used to make ethanol, which is then blended with gasoline. It is one of a few such plants for making ethanol from nonfood sources, such as wood chips or agricultural residue.
Verenium develops enzymes designed to streamline the process of preparing biomass for fermentation into ethanol. BP and Verenium have been working on the enzyme for a few years, one of the investments in biofuels technologies that BP has made.
"We are very pleased that our strategic development partnership with BP has successfully advanced our cellulosic ethanol technology to the cusp of commercialization," Carlos Riva, CEO of Verenium, said in a statement.
The acquisition will help BP Biofuels speed up delivery of "low cost, low carbon, sustainable biofuels at scale," said Philip New, the CEO of BP Biofuels.