BHP Billiton will provide funding, field data and technical advice on the oil and gas industry’s general requirements, and those funds will be used to conduct bench-scale trials of Biosignal’s compounds against organisms known to cause corrosion problems and in conditions that mimic oil and gas pipelines. Testing will use Biosignal’s compounds alone and in combination with biocides currently used in the industry.

Biosignal chief executive Michael Oredsson told BioTechnologyNews.net that the amount of money BHP Billiton would provide was confidential, but it would come in stages – there would be an initial sum that would pay for the next six months of development, but the miner was ready to commit additional money to fund the more expensive phase.

At this stage, Oredsson said, there were “no strings attached” to the deal – Biosignal will retain all intellectual property arising from the work – but the companies will hold more detailed discussions after the first round of trials, which should be completed in the next few months, after which a field study will be conducted at an operating oil facility.

“I’m not sure how long exactly the field trials will take; I’d say roughly six to 12 months, but the development is clearly much quicker than you have in the medical field,” Oredsson said.

He said other oil and gas companies were interested in the technology, and in fact BHP Billiton had approached Biosignal after seeing media reports on the company’s work last year. At this stage, however, it was too early to provide additional details on the identity of the other companies.

In February 2005 Biosignal and Q-Stat announced a continuation of their collaboration to further develop Biosignal’s anti-biofilm compounds to prevent bacterial corrosion of metals. The anti-biofilm technology is based on the discovery that an eastern Australian seaweed, Delisea pulchra, produces natural furanones that disable bacteria's ability to colonise while appearing to avoid the common problem of bacterial resistance.

Microbiologically Induced (Bacterial) Corrosion (MIC) occurs throughout oil and gas fields, at wellheads, in the gathering system, on oilrigs, and on the internal and external surfaces of pipelines, storage tanks and refining facilities, and is often responsible for leaks and blowouts.

Corrosion of steel infrastructure is estimated to cost the Australian oil and gas industry around $A675 million per annum in direct and deferred costs, based on corresponding US industry figures.

At 11.39am, Biosignal shares were trading A2c (11.76%) higher at A19c, after earlier hitting A20c.