Indian Oil Seeks Khosla-Ethanol Technology With Jindal

Indian Oil Corp. and Jindal Steel & Power Ltd. (JSP) are in talks to produce ethanol from waste gases using a technology backed by billionaire Vinod Khosla as India seeks to boost the use of green fuels amid rising crude prices.

The nation’s largest refiner and its biggest steel producer by market value may seek to build a commercial-scale ethanol plant with technology from LanzaTech, which uses microbes to convert industrial pollutants such as carbon monoxide into biofuels, LanzaTech said today in an e-mailed statement.

Waste gases from a Jindal steel plant could be used to produce the green fuel for blending with Indian Oil’s gasoline pool, it said.

India introduced a national biofuel policy in 2008 to counter the rising costs of oil imports to meet 80 percent of domestic needs after crude touched a record $147.27 a barrel three years ago. In the financial year ended March 31, Asia’s third-largest energy consumer spent $99 billion on crude imports, according to the oil ministry.

The policy requires refiners to blend gasoline for a 10 percent ethanol content and proposes to raise that to 20 percent by 2017. A shortage of sugar-based ethanol in the country has made it difficult for companies to comply with those regulations.

Crude futures have gained 22 percent in the past year. Crude for August delivery fell 0.1 percent to $92.82 a barrel on the New York Mercantile Exchange.

Auckland, New Zealand-based LanzaTech, founded in 2005, received $3.5 million in its first round of venture funding in a deal led by Khosla Ventures, according to a 2007 Lanzatech statement.

It raised $18 million last July in an investment led by Shanghai-based Qiming Ventures and joined by Khosla Ventures, K1W1 Ltd., an investment company owned by the founder of New Zealand’s largest discount retailer Stephen Tindall, and Softbank China Venture Capital, according to a website statement.

source: bloomberg