The company’s wholly-owned subsidiary, Jupiter Biofuels, has set up a Malaysian entity, Jupiter Biofuels Sdn Bhd.
All permits and land leases in relation to the biodiesel project in Malaysia will be progressed through this entity, according to Jupiter Energy.
The company has also finalised an option to lease six hectares of land on which the biodiesel production facility will be built and has submitted an application to the Malaysian Industrial Development Authority for a license to produce biodiesel.
Jupiter said it was also finalising port arrangements, evaluating technology for the plant and finalising biodiesel off-take agreements.
It has now begun negotiations regarding the supply of both crude and refined palm oil as feedstock for biodiesel production.
“The Jupiter board believes that biodiesel has now become economically competitive,” the company said.
This was because the price of oil had moved above $US70 per barrel and most analysts were predicting it would continue to rise, and new government regulations and commercial incentives had been introduced to increase the use of biofuels in the European Union, the United States and Australia.
In addition, there was increasing pressure to reduce greenhouse gases, and biodiesel reduces carbon dioxide emissions by 78% compared to conventional diesel, according to Jupiter.
“The capital markets are currently looking favourably on biodiesel projects with a number of successful ASX listings in recent months,” Jupiter said.
The Mission Biofuels prospectus currently in the market is specifically promoting a Malaysia-based biodiesel project. Darwin-based Natural Fuels Australia also plans to use palm oil as its biodiesel feedstock, which will probably be sourced from the South East Asian region.
On April 3, Jupiter announced plans to place 9.5 million shares with sophisticated investors at 6c per share to raise $570,000 before costs. The placement was completed on April 11.
On April 19, Jupiter announced plans to ask shareholders to pass a resolution at a general meeting, expected to be held in early June, to authorise the board to place up to 40 million ordinary shares at a minimum of 12.5c to raise $5 million.
Up to 8 million unlisted options would also be offered on the basis on one unlisted option for every five shares. These options would have an exercise price of eight cents and an expiry date of December 31, 2008.
The funds are to be used to continue to develop the Jupiter Biofuels project as well as fund other activities within Jupiter, including other potential acquisitions.
Until mid-2005, Jupiter Energy was called Westcoast. In June last year, it changed its name and focus to become an energy company. Its Victorian oil and gas operations, undertaken in partnership with Lakes Oil, have been unsuccessful so far.
