BP, Conoco back Skyonic plant to turn CO2 into products (Reuters) - U.S. carbon capture firm Skyonic has signed up BP Plc and ConocoPhillips as investors to back construction of a commercial plant in Texas that will turn carbon dioxide into chemicals for sale or into solids for placement in landfills. While funding from the two oil companies may only be in the millions of dollars, it supports a novel method of capturing carbon and turning a profit at the same time, Joe Jones, Skyonic's founder and chief executive, said in Reuters telephone interview from London on Monday. The patented process, which received Department of Energy grants a few years ago, would be deployed at a plant near Capitol Aggregates Inc in San Antonio, Texas, to offset 225,000 metric tons (248,020 tons) of CO2 every year once it starts up in 2014, he said. That compares with the 1 million metric tons capacity of an Air Products & Chemicals Inc project at a Valero refinery in Texas, due to start next year. CO2 captured at that $431 million project will be blasted into a depleted field underground to help Denbury Resources extract more oil. Early investors in his Austin, Texas-based company include Silicon Valley billionaire Carl Berg and Zachary Corp, owner of the Capital Aggregates cement plant. Jones said Skyonic's CO2 piped from Capitol's cement plant will mix with other chemicals to form hydrochloric acid and baking soda that can then be sold. Otherwise, it can be turned into solid minerals for disposal. The latest investments ensure Skyonic can make the jump to commercialization, since the sums would not add up if it built a series of, say, $1 million plants instead, he said. "We've had to make a leap to a $126 million plant to outrun our overheads, and make a profit, and plan to operate the plant for the next 20 years," Jones said. Jones, a trained chemical engineer who had worked in semiconductors, said the idea came from the extreme scrubbing done in the chip business with "really deadly things" like nerve gas, in which the properties of CO2 are used to capture them. The plant would take 15 percent of Capitol's CO2 emissions and process about 94 percent of that. By producing solids, the technology gets around concerns about leakage associated with other carbon storage systems, he said. Other investors in the $9 million of Series C financing - a round that Skyonics said would ultimately add up to at least $35 million based on what has been committed - are Northwater Capital Management and PVS Chemicals. "It's because we're coming to market right now that we're able to get these people on the same ticket," Jones said, adding that PVS had committed to buy all the acid made at the plant. The technology, known as SkyMine, is targeted at industrial plants, while Jones is also designing a separate offering for power plants producing 300 megawatts or more, called SkyCycle. Reporting by Braden Reddall and Rory Carroll in San Francisco; Editing by Bob Burgdorfer