LanzaTech strikes deal with NZSteel to extend project

Bjorn Heijstra, one of LanzaTech's scientists. Photo / Greg Bowker

An agreement struck by LanzaTech with New Zealand Steel reflects the biofuels company's move from development to commercialisation, says chief executive Jennifer Holmgren.

LanzaTech has its scientific base in Parnell and develops proprietary microbe technology which converts industrial waste gases into valuable chemicals including ethanol, used to make biofuel.

The company said the new agreement with NZ Steel would extend a pilot project to convert waste gases to low carbon fuels and chemicals.

The agreement gave NZ Steel and its Australian parent company Bluescope Steel the opportunity to use LanzaTech's technology commercially, it said.

The two companies had established a partnership in 2008 when LanzaTech built a pilot plant to produce ethanol from waste gases at NZ Steel's mill at Glenbrook.

The agreement reflected both LanzaTech's move from technology development to commercialisation and NZ Steel's commitment to supporting innovative solutions for sustainable growth, Holmgren said.

"Whereas before we had an R&D type of relationship now we've got more of a commercial relationship." she said.

LanzaTech in January secured more than US$55.8 million ($67.5 million) in new funding from international and local investors, including the investment arm of Malaysia's national oil corporation Petronas and Dialog Group, a Malaysian firm which provides technical services to the oil, gas and petrochemical industry.

Existing investors in the company - US-based Khosla Ventures, China's Qiming Ventures and Sir Stephen Tindall's K1W1 fund - also participated in the funding round.

LanzaTech has raised more than US$85 million since its founding in 2005.

Sir Richard Branson's airline Virgin Atlantic partnered with the clean-tech firm last year in a move the billionaire said could develop aviation from a dirty industry into one of the cleanest.

NZ Steel president Simon Linge said NZ Steel was founded on innovation and the relationship with LanzaTech was an extension of that innovative spirit.

"This agreement helps build our various investments in a sustainable manufacturing business and continues our commitment to lower our environmental footprint," Linge said.