Posted on March 21, 2013 at 6:30 am by Vicki Vaughan
Sapphire Energy's algae farm in Columbus, N.M., expects full-scale production of its algae-derived crude oil to reach 100 barrels a day late next year. San Antonio-based Tesoro will be Sapphire's first commercial customer. (Sapphire Energy)
San Antonio-based refiner Tesoro Corp. has agreed to purchase algae-derived “green” crude oil that will be made into diesel fuel at its West Coast refineries.
Tesoro will buy the oil from California-based Sapphire Energy Inc., which maintains an algae farm in Columbus, N.M., about 80 miles west of El Paso. Use of algae-derived crude reduces the need for fossil fuels.
Full terms of the deal were not disclosed, but Sapphire said Tesoro will be its first commercial customer.
Tesoro’s agreement calls for it to buy the crude through the end of this year with provisions to extend its purchases beyond that. Also, Tesoro has the option to buy more of the crude as Sapphire expands production.
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Sapphire, which counts Bill Gates and Monsanto among its investors, expects production to reach 100 barrels of crude a day in late 2014.
The deal “is enormously important for the industry,” Sapphire CEO Cynthia Warner said in a statement, “as it validates the benefits and advantages of green crude and confirms its place as a market-viable, refiner-ready, renewable crude oil solution.”
Tesoro vice president of renewable development Joel Larkins said in a statement that the company “is continuously looking at new technologies for producing renewable fuels.” Sapphire’s crude “shows promise as an alternative fuel solution.”