Sky Airline signs offtake agreement with PetroAlgae to bring renewable jet fuel to Chile
Sky Airline Boeing 737-200
Wed 17 Nov 2010 – Florida-based PetroAlgae and Chilean carrier Sky Airline have signed a non-binding offtake collaborative agreement to enable the purchase of feedstock produced by licensees of PetroAlgae’s commercial micro-crop technology for conversion into renewable jet fuel. The technology, consisting of light and environmental management systems, allows licensees to grow aquatic micro-organisms at a rate the company claims exceeds four times natural growth rates. This enables commercial-scale production of two end-products, a fuel feedstock, which can be converted into renewable jet fuel, and a protein that can be used in animal feeds. In April, Chilean company AIQ acquired an option to purchase a licence from PetroAlgae.
“We are excited to be working with PetroAlgae to bring green jet fuel to Chile,” commented Holger Paulmann, Director of Sky Airline. “Our airline has always prided itself on being at the forefront of change that is good for our customers, the economy and the country.
“With PetroAlgae’s commercial-scale biomass from micro-crops, we hope to develop clean renewable jet fuel in existing refineries, which will reduce our reliance on fossil fuels and create green jobs in the process.”
Sky, the country’s second biggest airline after LAN, is based in Santiago and serves 11 domestic airports and also has flights to Arequipa and Lima in Peru, and the Argentine and Bolivian capitals Buenos Aires and La Paz. It started operations in December 2001 and has a fleet of 11 Boeing 737-200 aircraft. Two Airbus A320s were due to be added this year.
Chile imports over 70% of its fuel in the form of oil, gas and coal, and is seeking to reduce its dependence on imports and is giving increased attention to renewable replacements that can be developed indigenously, says PetroAlgae.
“Today, attention and large-scale investment have turned dramatically towards the potential of micro-crops,” Andres De Carcer and Rosi Palmer of Asesorias e Inversiones Quilicura (AIQ), a major shareholder in public transportation company Subus Chile, said in April. “We are pleased to be working with such an experienced management team, capable of rapidly deploying their technology in Chile and of opening a path to sustainable and clean energy independence while promoting local job growth.”
By precisely managing exposure to light, PetroAlgae’s technology is able to dramatically increase the growth and productivity of indigenous organisms in open-pond bioreactors, thereby creating micro-crops such as algae. The micro-crops absorb around twice their weight in CO2 and are harvested every few hours, says the company.
Despite the promise of the technology, the company has endured a rocky road financially, losing a reported $58 million over three years, with no sizeable revenues and just one apparent short-term licence sold to an Indian oil company. In August PetroAlgae announced an IPO, underwritten by Goldman Sachs, UBS and Citi, that is anticipated to raise a further $200 million in funding. The company is largely owned by a New York hedge fund.
PetroAlgae would not reveal what amount of renewable jet fuel Sky was willing to purchase nor when supplies might begin.