US-based Genomatica said Monday it and Japan's Mitsubishi Chemical Corp. are planning to jointly pursue a bio-BDO (1,4-butanediol) project in Asia.

The pair signed an agreement to "exclusively negotiate definitive agreements for a joint commercial operation" of a BDO plant, which will be built at a still undetermined site in Asia, Genomatica said in a statement.

Mitsubishi has made an up-front payment to Genomatica of $3.5 million while the companies "continue to work toward completing their definitive agreements, some or all of which may be repaid upon certain conditions," Genomatica said.

The agreement will be in effect until June 30, or until the companies execute a definitive agreement, it said.

The agreement followed the memorandum of understanding they signed in April 2011, in which they outlined potential areas of collaboration, including a possible joint venture to build the first commercial-scale bio-BDO plant in Asia.

Mitsubishi made an equity investment in Genomatica as part the latter's $45 million fundraising early last year.

The green BDO will be made from renewable feedstocks rather than oil or natural gas. BDO, an intermediate chemical with a $4 billion global market, is used to make spandex, automotive plastics, and running shoes.