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Paul Allen speaking at Seattle’s Town Hall.

Microsoft co-founder Paul Allen’s Vulcan Capital is co-leading a $30 million investment in Siluria Technologies, a San Francisco company that’s developing methods to convert natural gas into plastics, chemicals and transportation fuels.

Siluria uses methane, which is the key component of natural gas and the world’s most abundant hydrocarbon, in a conversion process that includes advanced nanotechnology, biotechnology and chemical engineering.

The company says it is the first to provide “an economically viable and commercially scalable alternative to petroleum.” And it says the products produced from natural gas are indistinguishable from those made from oil, which is about five times as expensive as natural gas.

In tests at two pilot facilities, Siluria says it plans to start developing a new commercial demonstration facility next year.

“Siluria provides an answer to one of the world’s greatest challenges: the ability to produce commodity chemicals and transportation fuels from a resource that is a cheaper and more abundant than oil,” said Vulcan Capital’s Steve Hall in a press release. “With Siluria’s technology, natural gas can become a fundamental building block for a number of industries.”

Allen has invested in the energy sector in the plast, bankrolling oil and natural gas pipeline company Plains All American in 2004. He’s also a backer of clean tech upstarts, including Kennewick solar power company Infinia.

Other investors in the venture round include Bright Capital, Arch Venture Partners, The Wellcome Trust, Alloy Ventures, Kleiner Perkins Caufield and Byers, Lux Capital, Altitude Life Science Ventures and Presidio Ventures. Total funding now stands at $63.3 million.

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