Tesoro Corporation to Purchase Biocrude Company Virent Energy Systems

Researched by Industrial Info Resources (Sugar Land, Texas)--Privately held, plant-based renewable fuel and chemical producer Virent Energy Systems Incorporated (Madison, Wisconsin) has agreed to be bought by leading U.S. independent petroleum refiner and marketer Tesoro Corporation (NYSE: TSO) (San Antonio, Texas).

Terms of the deal were not disclosed. Since early this year, Tesoro has been eying investments in biocrude made from renewable biomass, which can be co-processed in its existing refineries, along with traditional crude oil.

Tesoro has been looking at biocrude technology developed by Virent, Fulcrum BioEnergy Incorporated (Pleasanton, California) and Ensyn Corporation (Ottawa, Ontario) to enable existing refining assets to produce less carbon-intensive fuels at a significantly lower capital and operating cost than competing technologies.

Virent has been looking to take its BioForming technology for the production of low carbon bio-based fuels and chemicals to commercial-scale since 2010. The deal with Tesoro will support the pathway to commercialization and utilize the oil company's refining, marketing and logistics infrastructure.

Virent is eying construction of a commercial-scale plant in the Pine Belt region of Southeast Mississippi, where soft pine wood is in abundance. The soluble C5 and C6 sugars and starches from the material can be converted into gasoline, jet fuel and renewable diesel.

Virent had partnered with Virdia Incorporated (Danville, Virginia) to construct the estimated $150 million commercial scale plant in Mississippi utilizing Virdia's lignocellulose conversion technology, but it is unclear if the partnership is still in place. There has been no movement on a commercialization project since 2012. Virdia was acquired by Stora Enso Biomaterials (Helsinki, Finland) in 2014.

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