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GreatPoint Energy Inc. on Monday announced a $100 million Series C venture financing that will allow the clean technology startup to build and operate a large-scale demonstration facility for its catalytic gasification technology, which converts coal, petroleum coke and biomass into natural gas. The financing was co-led by new investors Sustainable Development Investments, a unit of New York-based Citibank's Alternative Investments unit and Dow Chemical Co. of Midland, Mich., joined by the AES Corp. of Arlington, Va. and Suncor Energy, Inc. of Calgary, Alberta. Also participating were existing investors Kleiner Perkins Caufield & Byers, Draper Fisher Jurvetson and Khosla Ventures, all of Menlo Park, Calif., as well as Advanced Technology Ventures of Palo Alto, Calif. Founded in 2004, GreatPoint had secured roughly $37 million in its first two rounds, said chief financial officer Daniel Goldman. The demonstration facility, expected to be up and running in 2009, will be "a large facility that will process anywhere from 50-100 tons of feedstock a day," he said. Once the facility is constructed, Great Point will use the remaining funds from the venture round to begin developing the first of its commercial natural gas manufacturing plants. The facility will produce natural gas and enable the capture and sequestration of carbon dioxide gas. Goldman said the company expects to raise more capital in order to finish the construction of its first plant. "This a very capital-intensive business, so we'll definitely be raising more money in the future," he said. "We'll definitely be watching the market carefully and looking to opportunistically raise money when we think the market is right." The company plans to build its manufacturing plants in coal mining areas in Montana, North Dakota and Wyoming. "There are low-cost and abundant coal resources [in those states] that we can leverage," Goldman said. "The beauty of it is that there are already alot of natural gas pipelines that cut across those states, so we can easily tie in and sell our gas through the natural gas pipeline. "And the most important thing is we can sequester our CO2 that comes out of our plants in those areas because there's a lot of enhanced oil recovery," he continued. "So we can take our CO2 and pump it into oil reservoirs for pressure maintenance to produce more oil." GreatPoint will also look at building plants in Alberta, Canada, where much development is going into upgrading oil sands into synthetic oil. A waste product of those efforts is petroleum coke, which Goldman said the company will turn into natural gas. Cambridge, Mass.-based GreatPoint also expects Dow, AES, and Suncor Energy to participate in the scale-up, development, construction and operation of the natural gas manufacturing facilities. Representatives from the strategic investors, as well as Citibank's Alternative Investments unit, have taken seats on the company's board of directors.  Deal Video
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