Algae technology company Solazyme Inc. will partner with a large Brazilian agribusiness to build a commercial renewable oil production facility, Solazyme CEO Jonathan Wolfson announced yesterday.

This will be the first commercial fuel venture for the nine-year-old San Francisco-based company. While Solazyme has counted fuel among its products, it has previously focused on scaling up technology that uses algae to convert plant sugars to oils for chemicals and products in the nutrition, skin and personal care industry.

Wolfson announced the joint venture with Bunge Ltd. at the annual Advanced Biofuels Leadership Conference in Washington, D.C.

"This announcement with Bunge is all about our first large-scale fuels and chemicals plant, but we're already using existing fermentation that we've been leasing to produce products in food and for cosmetics," Wolfson said in an interview.

For Bunge, the venture is an opportunity to add a "much broader set of products" to its portfolio, Ben Pearcy, Bunge managing director for sugar and bioenergy, said yesterday at the conference.

The venture will build the plant in São Paulo, Brazil. It will produce 100,000 million tons of a drop-in renewable fuel or one that can be added to existing infrastructure.

Construction will begin later this year and will be completed in 2013, Wolfson said.

Solazyme's technology involves feeding carbohydrate-based feedstocks into dark vats containing microalgae. After a few days, the algae convert the sugars into oils that Solazyme tailors to work in its variety of end-products.

The Brazilian plant will produce and sell tailored triglyceride oil for the algochemicals and fuels markets.

Solazyme has partnered with the Department of Defense to test its fuel on destroyers and frigates. Last year, a United Airlines Boeing 737-800 plane flew from Houston to Chicago on 40 percent "Solajet" fuel and 60 percent petroleum-derived jet fuel.

"We started commercializing in 2010, and this announcement is the last leg of commercialization for the company," Wolfson said. "It's a critical one because these are our biggest market opportunities, but it's also the one that makes sense that would be the last one because it's the one that requires the most capital."