Algae-based oils company Solazyme has signed a letter of intent with Dow Chemical to provide variants of its algal oils for use in high-temperature transformer equipment. The move signals a new market for Solazyme, which has been carving out a niche for itself in algal fuels.
The two companies signed a letter of intent and a joint development agreement to develop the startup's algal oils for use in dielectric insulating fluids. These oils are designed for use in high-temperature environments such as transformers and other electrical applications.
BP declares biofuels the only route to cleaner transportDow will use Solazyme's feedstock along with its expertise in dielectric insulating oils to create the fluids. The non-binding letter of agreement allows Dow to obtain up to 20m gallons of the algal oil in 2013, rising to three times that amount by 2050.
The deal provides Solazyme with another blue-chip client following a number of agreements with airlines. Most notably, Australian airline Qantas signed a deal with the firm in February to explore the use of algae-based aviation fuel created by the fledgling biotechnology firm.
Founded in 2003, Solazyme, headquartered in San Francisco, produces oil and biomaterials from algae using standard large-scale fermentation facilities. The company claims the resulting low-carbon oils can be used as replacements for fossil-based petroleum, as well as a broad spectrum of natural plant oils and compounds used by the cosmetics, foods and chemicals industries.
