PetroSun announced this morning that it established a wholesale market price for algal oil. The price will closely match the crude oil market price in addition to transportation costs. The company stated that it will consider giving discounts depending on the size of orders.
Soy oil’s recent market price is about $2.81, which is 64% pricier than the $1.71 a gallon that PetroSun expects to sell at if crude oil market prices are $72.00 per barrel. Algal oil doesn’t have commodity risk as crude oil, corn and soybeans do, plus it doesn’t contain any sulfur, is non-toxic, and is highly biodegradable.
While the current stated capacity of existing and planned biodiesel refineries in the United States is estimated to be 2.5 billion gallons a year by 2008, PetroSun has established a 3-year plan to build algae cultivation pods and extraction plants with the potential to produce 2.56 billion gallons per year. The annual gross revenue that could be achieved through this amount of production is valued at $4.38 billion, based on the price of $1.71 per gallon.
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