The Associated Press June 8, 2010, 11:51AM ET
Royal Dutch Shell PLC said Tuesday it has purchased a stake in U.S. biotech startup Virent Energy Systems Inc., a company that turns plant sugars into fuel closely resembling gasoline.
Shell declined to disclose terms of the deal. It will receive a seat on the board of directors of Virent, based in Madison, Wisconsin.
Virent, with around 70 employees, has previously received $10 million (euro6.4 million) in U.S. government aid and $40 million ((euro25.5 million) in venture capital backing.
Shell and Virent announced a five-year test partnership in 2008 and said they hoped one day to move to large scale production.
Virent says its technology has advantages over better-known processes that turn plant matter into ethanol. The fuel that Virent makes is a substitute for normal gasoline, potentially eliminating the need for gasoline-biofuel blends, or the specialized infrastructure needed to use pure ethanol.
It also works on grasses, which would make it easier to employ in different parts of the world and not compete with food crops.
Shell, Europe’s largest oil company, said in 2009 it would focus future renewable investment efforts mostly on biofuels, rather than wind or solar energy.
In February it announced a $12 billion ethanol joint venture with Brazil’s Cosan SA.