The bio-refinery is the first in a series of up to five plants that AR Fuels aims to roll out by 2007.
The company also announced its first distribution agreement today, signing a five-year deal with Dermody Petroleum that could see that company taking the plant’s entire output – up to 45M litres of biodiesel per annum with a guaranteed minimum volume component. The fuel will be mixed with petrodiesel and sold as a blend, AR Fuels managing director Darryl Butcher told EnergyReview.net.
At current spot price, this deal has a value of up to $250 million in revenue terms for the period of the contract, according to Butcher.
“This is the first phase in our expansion strategy, which will see AR Fuels become Australia’s largest producer of biodiesel,” he said.
“We are pleased to be announcing the first agreement between a biodiesel producer and a major oil company distributor, making large-scale biodiesel available to the broad transport market for the first time. It paves the way for motorists to be able to choose an environmentally responsible, sustainable source of fuel for their daily needs.
“The widespread availability of biodiesel will make a tangible contribution to the reduction of greenhouse gases. The production coming from this plant alone will abate more than 115,000 tonnes of greenhouse gases each year.”
AR Fuels’ second plant located in Picton, Western Australia is currently scheduled to start production at the end of April. The company then plans to build up to another three plants in Australia’s eastern mainland states, Butcher told EnergyReview.net.
Upon completion of the fifth plant, AR Fuels will be Australia’s largest producer of biodiesel with more than 220M litres under production.
AR Fuel’s biodiesel is produced from tallow supplied under a five-year contract by Gardner Smith. It is refined using the Energea technology. Energea is a leading technology provider in Europe and is currently constructing the world’s largest biodiesel plant in the UK.
Dermody Petroleum is one of the leading fuel distributors in rural South Australia and is a regional distributor for BP, operating and/or supplying almost 60% of the state’s BP retail outlets.
