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Tesoro to acquire renewable fuels company Virent

Renewable fuels and chemicals company Virent and petroleum refiner and marketer Tesoro have reached an agreement for Tesoro to become Virent’s new strategic owner. The acquisition will support the scale-up and commercialization of Virent’s BioForming technology for the production of low carbon bio-based fuels and chemicals. (Earlier post.)

The companies initiated a strategic relationship in January 2016 (earlier post), and have worked together to establish a forward plan to scale-up the technology and reduce deployment risks to meet the increasing demands for high quality, renewable fuels and chemicals.

Virent’s BioForming platform is based on a novel combination of Aqueous Phase Reforming (APR) technology with modified conventional catalytic processing. The APR technology was discovered at the University of Wisconsin in 2001 by Virent’s co-founder and chief technology officer, Dr. Randy Cortright. (Earlier post.)

The process has been demonstrated with conventional sugars obtained from existing sugar sources (corn wet mills, sugarcane mills, etc.) as well as a wide variety of cellulosic biomass from nonfood sources. The process can accommodate a broad range of compounds derived from biomass, including C5/C6 sugars, polysaccharides, organic acids, furfurals and other degradation products generated from the deconstruction of biomass.

The soluble carbohydrate streams can consist of a wide range of molecules as depicted below and are processed through the aqueous phase reforming step. The aqueous phase reforming step utilizes heterogeneous catalysts at moderate temperatures and pressures to reduce the oxygen content of the carbohydrate feedstock. Some of the reactions in the APR step include:

  1. reforming to generate hydrogen;
  2. dehydrogenation of alcohols/hydrogenation of carbonyls;
  3. deoxygenation reactions;
  4. hydrogenolysis; and
  5. cyclization.

The BioForming process can produce hydrogen in-situ from the carbohydrate feedstock or utilize other sources of hydrogen such as natural gas for higher yields and lower costs.

The product from the APR step is a mixture of chemical intermediates including alcohols, ketones, acids, furans, paraffins and other oxygenated hydrocarbons. Once these intermediate compounds are formed they can undergo further catalytic processing to generate a cost-effective mixture of non-oxygenated hydrocarbons.

The chemical intermediates from the APR step can be reacted over a Virent modified ZSM-5 catalyst to produce a high-octane gasoline blendstock that has a high aromatic content similar to a petroleum-derived reformate stream. Virent has trademarked this product BioFormate.

The chemical intermediates from the APR step can also be converted into distillate range hydrocarbon components through a condensation step followed by conventional hydrotreating.

Virent’s technology can replace more than 90% of the products that come from a barrel of crude oil. Source: Virent. Click to enlarge.

The Virent technology can convert plant-based materials into a full range of products identical to those made from petroleum, including gasoline, diesel, jet fuel (including aromatics, earlier post), and chemicals for plastics and fibers—most notably para-xylene, a key component in polyester (earlier post). The products are drop-in replacements that enable full utilization of existing logistics infrastructure without blending limitations.

Tesoro will operate Virent as a wholly owned subsidiary which will be located in Madison, Wisconsin. Included in the acquisition are existing collaboration agreements, all licenses, a significant intellectual property portfolio and pilot and demonstration facilities. Tesoro plans to continue and cultivate Virent’s existing business partnerships and relationships in order to support its mission. The transaction is expected to close by the end of September.

Tesoro is a Fortune 100 independent refiner and marketer of petroleum products. Tesoro, through its subsidiaries, operates seven refineries in the western United States with a combined capacity of over 895,000 barrels per day.

Tesoro’s renewable fuels strategy is to foster the development of high-quality, lower-carbon, renewable feedstocks and blendstocks that can either be co-processed in existing refineries or blended seamlessly with traditional fuels. Tesoro believes it is important to commercialize new technologies that meet stakeholder expectations and regulatory requirements by producing renewable fuels that do not compromise product quality. By generating valuable credits, this approach may also lower Tesoro’s compliance costs with the federal renewable fuel standard and California’s low carbon fuel standard (LCFS).


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