United Agrees to Buy Algae Biofuel From Solazyme for Air Travel

United Continental Holdings Inc. (UAL), which operates United and Continental airlines, agreed to buy from Solazyme Inc. 20 million gallons (76 million liters) of jet fuel a year made from algae.

Continental Airlines is using Solazyme’s fuel blended with standard, petroleum-derived jet fuel in a flight today from Houston to Chicago, the Chicago-based airline holding company said today in a statement that didn’t include the price.

The trip is the first U.S. passenger flight to use advanced biofuels, Chicago-based United Continental said.

Solazyme will begin delivering the biofuel as early as 2014, the statement said. The South San Francisco, California- based biofuel company produces an oil from algae, and Honeywell International Inc. (HON) processes it into fuel.

Solazyme fell 4.8 percent to $9.43 at 1:32 p.m. in New York, ahead of its third-quarter earnings report that is set to be released this afternoon.

To contact the reporter on this story: Ehren Goossens in New York at egoossens1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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