Valero Services, a subsidiary of the oil refiner Valero Energy, has signed a joint development agreement with Algenol Biofuels to share technology regarding "production and distribution of transportation fuels and chemicals," the company announced Thursday.
Algenol Biofuels, which was founded in 2006, has developed technology that capitalizes on certain types of algae with natural sugar-making abilities, harnessing their enzymes to ferment sugar into ethanol. The metabolically enhanced algae are grown in bioreactors. They're then manipulated with a combination of things like nutrients, water, pH levels, temperature, and salinity to produce ethanol, according to Algenol.
The amount and terms of the deal were not disclosed.
But this is not the first large deal for the algae start-up. In June 2008 Algenol signed a deal with BioFields in whichin order to build a $850 million saltwater algae farm in Mexico's Sonoran Desert.
The Bonita Springs, Fla.-based company has also received, $25 million of which will go toward building an algae refinery in partnership with Dow Chemical.
It's also not the first algae investment for U.S. oil refining giant Valero. The Texas-based company already owns a stake in Solix Biofuels.