KL Energy Corporation (KLE)(KLEG.PK) announced a joint development agreement with Petrobras (NYSE: PZE) for the optimization of KLE's proprietary cellulosic ethanol process technology for sugarcane bagasse feedstock.
As part of this agreement, subsidiary Petrobras America will provide $11 million to
adapt KLE's demonstration facility in Upton, Wyoming to the use of Bagasse, validate the process by producing cellulosic ethanol and bio-lignin from
Bagasse in multiple campaigns and license the technology.
The demonstration plant, established in 2008, currently uses Ponderosa
Pine as a feedstock. KLE says the process can be optimized for numerous
feedstocks.
Petrobras and KLE also will jointly work on an industrial scale Bagasse based cellulosic ethanol plant project to be integrated into a Petrobras sugarcane mill in Brazil. That is slated to go on stream in 2013, producing 15 million liters per year.
The agreement, which has an initial term of 18 months and provides for mutual exclusivity in the area of developing cellulosic ethanol from Bagasse, provides Petrobras with the option to enter into a technology license for the use of KLE's technology within Petrobras Group assets.
Miguel Rossetto, CEO of Petrobras Biocombustível, said, "Petrobras views cellulosic ethanol as a very promising technology to substantially increase the ethanol output by some 40% without increasing the planted area output and further improve the carbon footprint of its sugarcane mills."
Petrobras is a major integrated oil, gas, and energy company. Established in 1953 as Brazil's National Oil Company, it is now one of the world's ten largest companies by market capitalization.
