BY TED M. NATT JR.

Business Writer

Avjet Biotech Inc. is incrementally ramping up to full-scale production of aviation biofuel for the military and commercial markets while positioning itself to become a publicly traded company.

"We're shooting for the gold standard," says John Evans, the company's vice president.

The Pinehurst company, which was founded last August as Red Wolf Refining Corp., has been privately funded by about 30 individuals. But Evans says angel investors may be considered in the near future.

"It's about getting enough money to take it to the next level," Evans says.

The patented Red Wolf Process (RWP), which was developed by professors at North Carolina State University, converts fat-containing oils into green diesel, jet and gasoline fuels using three main steps: hydrolysis, deoxygenation and hydrocarbon reforming.

The oils that RWP uses are extracted from plant, plant-like or animal (processing by-product) sources such as jatropha, camelina, soy, canola, palm, algae, yellow grease (chicken fat) and hog fat.

The fit-for-purpose fuels from this process meet specifications for JP-5 and JP-8, which are aviation fuels mainly used by the military.

"It's a refining system that starts at the top, not the bottom," says Don Evans, chairman and CEO of Avjet. "It's all based on economics. That's why our refineries are already in demand."

Earlier this year, Avjet Biotech completed a license agreement to commercialize all patents and intellectual property related to the Professor Roberts biofuels program at N.C. State, including products for the pharmaceutical and fine chemical industries from genetically modified marine microalgae. The license agreement is currently global in scope because it extends to 22 foreign countries where patents have been filed.

Don Evans says that various oil feedstocks derived from jatropha, camelina, chicken fat and palm have successfully been run through RWP at the lab scale of one liter per day.

"We have completed Phase I of taking the product to market, which is proof of concept," he says. "The next step, or Phase II, is 20 liters per hour. You don't want to take many financial risks in doing this, so you start off with small-batch production and incrementally grow from there."

Phase II, or pre-prototype production, is expected to be fully operational by October in 8,000 square feet of space at N.C. State. Phase III will require 12,000 square feet of space because production is ramped up to 400 liters per hour, and Avjet officials are shooting for next May to accomplish the final pre-full scale production goal.

"The military will start buying the fuel during Phase III," John Evans says.

Meanwhile, Avjet has developed strategic relationships with BioJet International Ltd., an international supplier of renewable aviation fuels, and Continental Technologies, which designs, fabricates, installs and operates refineries.

The agreement with BioJet allows the Santa Barbara, Calif.-based company to use RWP to build refineries that will produce aviation biofuels from native feedstocks around the globe. BioJet currently has 10 million acres under cultivation worldwide.

"We are committed to helping airlines increase their use of sustainable biofuel, and this technology will allow us to place refineries that will turn native feedstock into aviation biofuel," BioJet CEO Mitch Hawkins says. "We are looking forward to implementing (the technology) at multiple locations."

The agreement with Continental Technologies enables the Boulder, Colo.-based firm to produce plans, specifications, schematics and equipment designs for the small refineries, which require only about two acres of land because annual production will not exceed 15 million gallons.

"Continental's knowledge, support and years of experience will help Avjet become the turnkey provider for organizations who need small, distributive refineries," Avjet President Marty Oliver says. "We don't want to get into running refineries. We just want to sub-license the refining process."

Avjet is headquartered in Pinehurst at Magnolia Place for two reasons - the three principals live in Pinehurst, and the village's proximity to Fort Bragg and Research Triangle Park.

"Our responsibilities are such that we need professional office space like this and access to talented people," Don Evans says. "Pinehurst is becoming a bedroom community for RTP. People don't mind the commute because of our quality of life here."

Contact Ted M. Natt Jr. at tnatt@thepilot.com.