Report: GreatPoint Energy Grabs $420M from Chinese Investor

After last night’s stellar event with Amory Lovins and Jim Matheson, I’m thinking about our energy and cleantech future today. Luckily, so is a Boston-area company that apparently makes billion-dollar deals for breakfast.

GreatPoint Energy, a coal-to-natural-gas company in Cambridge, MA, has formed a $1.25 billion partnership with China Wanxiang Holdings, in a deal that includes $420 million in Series D equity investment, according to a report by Lora Kolodny in Dow Jones VentureWire (see the Wall Street Journal article here).

GreatPoint, which started in 2004, previously raised more than $100 million from investors including Advanced Technology Ventures, Draper Fisher Jurvetson, Kleiner Perkins Caufield & Byers, Khosla Ventures, Citi Sustainable Development, Dow Chemical, and Suncor Energy. ATV has confirmed the deal, but I haven’t been able to reach original investor Bill Wiberg for comment yet.

According to the report, GreatPoint plans to build a large-scale coal gasification plant in China to convert coal into methane (the main component in natural gas, which burns cleaner than coal) and carbon dioxide (which can be sold to oil companies to extract more oil from existing wells). The company has done tests at pilot plants in Massachusetts, Illinois, Iowa, and North Dakota.

Today’s deal is also significant because it is the largest equity investment by a private Chinese company in a U.S. venture-backed firm, the report says.

Interestingly, a study published this week by Nathan Myhrvold and Ken Caldeira suggests that natural gas plants are a good start, but not enough by themselves to curb the effects of climate change (here’s the paper).

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