Algae.Tec (ASX: AEB, FWB: GZA: GR, ALGXY: US) is moving in leaps and bounds towards production as it prepares to commission its Shoalhaven One showcase facility later this month.
The demonstration facility is located next to the nation’s largest ethanol producer Manildra Group’s industrial facility in Nowra, south of Sydney.
The cement platform structure with associated plumbing has been completed and is ready for the containerised bioreactor technology.
The enclosed modular technology captures carbon dioxide waste from power stations and manufacturing facilities, which feeds into the algae growth system.
Algae.Tec is one of few advanced biofuels companies globally with an enclosed modular engineered technology designed to grow algae on an industrial scale and produce biofuels that replace predominantly imported fossil fuels for transportation use.
The Algae.Tec solution is less than one tenth the land footprint of pond growth options, while its enclosed module system is designed to produce algae biomass in virtually any environment.
The system is designed to deliver the highest yield of algae per hectare and, importantly, does not require the use of food producing land for biofuel production.
Commissioning of Shoalhaven One is now expected to begin in late April rather than the end of March, due to unprecedented rains and floods in the region.
Technical Director Earl McConchie will arrive from the U.S. next week to oversee the final phase of the project.
Meanwhile, project planning for the algae to biofuels facility at Holcim Lanka’s cement plant in Sri Lanka is now complete.
The bioreactors are being fitted out at the Algae Development & Manufacturing Centre in Atlanta, Georgia, which has been expanded and upgraded to accommodate these commercial production programs. The bioreactors will be dispatched by late May.
Late last year, Algae.Tec signed a collaboration agreement with Holcim Lanka to build its first algae biofuels production facility in Asia that will reduce carbon dioxide emissions from cement manufacturing.
Holcim Lanka, a cement and building materials company, has agreed to build the facility in Sri Lanka in conjuction with Algae.Tec as its technology is in line Holcim's desire to be environmentally sustainable.
Holcim Lanka is part of Holcim Group (VTX: HOLN), which is a global company with market presence in over 70 countries on all continents. The group employs some 90,000 people and is currently the world’s largest cement manufacturer.
Algae.Tec executive chairman Roger Stroud said both the Shoalhaven One and Holcim facilities offer algae carbon capture and storage solutions.
“In Nowra the Algae.Tec facility will take a carbon feed from the Manildra Group operations, and in Sri Lanka the facility will take a feed from the subsidiary of industrial giant Holcim, the world’s largest cement and building materials company,” Stroud said.
Milestone agreements
Early this year, Algae.Tec signed a binding memorandum of understanding for a 50:50 equity joint venture in China with Shandong Kerui Group Holding to build the first biofuels and carbon capture facility in China.
Stroud told Proactive Investors at the time, importantly, Shandong would be putting half the equity into the project, which shows very strong commitment to the project on their part.
“The Algae.Tec technology will reduce unwanted emissions and will convert them into locally produced transport fuels which will add to fuel independence,” he said.
The 250-module biofuels facility will be built in Dongying, in Shandong Province, and will produce about 33 million litres of algae derived transport oil and 33,000 tonnes of biomass per annum at a combined value of over $40 million.
It will capture 137,000 tonnes of waste carbon dioxide.
Another milestone agreement signed by the company is the biofuels memorandum of understanding with European airline Lufthansa.
The two companies have agreed to evaluate algae oil produced from Algae.Tec's bioreactors as a sustainable source of aviation fuel.
Atlanta expansion
The news does not stop there, however, with Algae.Tec also revealing an almost fourfold expansion to its Atlanta facility, the company’s research and development hub for global operations.
The facility has increased from 18,000 square feet to 70,000 square feet and fitted out for production line capability for existing and upcoming commercial projects.
Forward plans for Algae.Tec
Recently Stroud told Proactive Investors how Algae.Tec continues to look for, and enter into, global alliances:
“We intend to continue to talk to groups about offtake agreements, about supply and obviously more joint venture arrangements of a country-wide nature,” he said.
“In other words, with China, this joint venture (Shandong Kerui Group Holding) is with the group for the whole of China. So we will want to do the same thing in the U.S., the same thing in Australia and the same thing in Brazil.”
Comment
With the facility at Nowra moving closer to commissioning and expansion at the Atlanta facility, as well as agreements in place with Holcim and Lufthansa, the recent retracement in share price offers investors an opportunity to re-load ahead of news flow.
AEB Price at posting:
37.0¢ Sentiment: Buy Disclosure: Held
