Primus Green Energy Nears Fuel Deal With Airline, CEO Says
Primus Green Energy Inc., a biofuel company backed by Israel Corp., expects to sign a deal this month to sell natural gas-based jet fuel to a global airline.
The agreement will help Primus raise private debt and equity to build a $180 million commercial plant next year in the southern U.S., Chief Executive Officer Robert Johnsen said. The airline would help Primus in getting the fuel certified, possibly by the end of 2015, for use in first commercial flights a year later, he said.
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“We’re at the end of the drafting of the preliminary agreement,” Johnsen said in an interview yesterday in Berlin on the third day of the Berlin Air Show. “We’re focusing on the opportunities of cheap gas in the U.S. where the price is very low and it’s predicted to stay low for decades.”
Airlines won approval from the U.S. technical standards body last year to fly passenger planes using a 50-50 blend of petroleum-based fuel and biofuel. Airlines including Air France- KLM Group and Deutsche Lufthansa AG (LHA) have started flying planes on used cooking oil.
Primus has received $40 million since 2007 from IC Green Energy Ltd., the renewable-energy arm of Tel-Aviv-based holding company Israel Corp., which will invest another $21 million starting next month.
Primus has developed a process that can turn biomass or natural gas into a liquid fuel for use in cars or jets. It would be profitable starting at $65 a barrel of petroleum and would reduce CO2 emissions compared with conventional fuel 80 percent if biomass, and 20 percent if gas is used, said George Boyajian, vice president of business development.
“Our fuels are chemically identical only cleaner,” Boyajian said in the same interview. The potential deal’s volumes would be about 1 percent of the airline’s global fuel needs as it seeks to diversify them, he said.
The commercial plant will be designed by Bechtel Group and would produce 25 million gallons a year, Johnsen said. Primus, which has about 45 employees and is based in Hillsborough, New Jersey, wants to build a series of 100 million-gallon plants after that, he said.
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