Tesoro Corp. acquires Virent Inc.
Tesoro Corporation, an independent refiner and marketer of petroleum products based in San Antonio, Texas, U.S.A., is acquiring Virent, Inc., an innovative renewable fuels and chemicals company. The financial terms of the transaction, which is expected to close by the end of September, were not disclosed.
Virent’s BioForming(R) technology can convert sugars and other biomass derived feedstocks into renewable gasoline blendstocks and aromatics, which are fully compatible with the nation’s existing fuel infrastructure and current vehicle warranties. Virent’s aromatics product can also be used for renewable chemicals, most notably paraxylene, a key component in polyester.
The companies initiated a strategic relationship in January 2016 and have worked together to establish a forward plan to scale-up the technology and reduce deployment risks to meet the increasing demands for high quality, renewable fuels and chemicals.
“The Tesoro announcement is a critical milestone for Virent to establish a pathway to commercialization with a recognized leader in refining, marketing and logistics. While we will maintain our entrepreneurial spirit and culture, Virent will also benefit from the strategic support and capability of Tesoro, capturing the best of both companies,” said Lee Edwards, Virent CEO. “We are excited to start the next phase of work with Tesoro, along with our other strategic partners.”
Tesoro will operate Virent as a wholly owned subsidiary, which will be located in Madison, Wisc., U.S.A. Included in the acquisition are existing collaboration agreements, all licenses, a significant intellectual property portfolio and pilot and demonstration facilities. Tesoro plans to continue and cultivate Virent’s existing business partnerships and relationships in order to support its mission.
“With this acquisition, Tesoro intends to foster more rapid commercialization of Virent’s renewables technology, which could uniquely position the company with an improved means of future regulatory compliance, as well as potential licensing opportunities,” says C.J. Warner, executive vice president of operations at Tesoro.
“Tesoro plans to provide resources and expertise to support the scale-up and commercialisation of the technology while maintaining Virent’s innovative culture and business that are key to its success.”
Tesoro’s renewable fuels strategy is to foster the development of high-quality, lower-carbon, renewable feedstocks and blendstocks that can either be co-processed in existing refineries or blended seamlessly with traditional fuels.
Tesoro believes it is important to commercialize new technologies that meet stakeholder expectations and regulatory requirements by producing renewable fuels that do not compromise product quality. By generating valuable credits, this approach may also lower Tesoro’s compliance costs with the federal renewable fuel standard and California’s low carbon fuel standard.
Tesoro, through its subsidiaries, operates seven refineries in the western United States with a combined capacity of more than 895,000 barrels per day and ownership in a logistics business, which includes interest in Tesoro Logistics LP and ownership of its general partner. Tesoro’s retail-marketing system includes more than 2,400 retail stations under the ARCO(R), Shell(R), Exxon(R), Mobil(R), USA Gasoline(TM), Rebel(TM) and Tesoro(R) brands.