"Today, we have entered into a sales contract for all of our naphtha production from Stage 1 of the Stuart Oil Shale Project, through 2005," said SPP managing director, Jim McFarland.

"First sales under this new contract are expected to occur in July 2002. Over the contract term, naphtha sales could total more than two million barrels."

SPP has been the subject of a vehement campaign conducted by Greenpeace, who claim that producing oil from shale rock is a "greenhouse belcher". Until the announcement, Greenpeace had been successful in stopping some of Australia's major oil refineries from purchasing the naphtha product.

"This naphtha sales contract is an important milestone for the company since it establishes a reliable market for our growing naphtha production. Because the sales are to an Australian refiner, we are also to access a valuable excise tax rebate on naphtha production," Mr McFarland said.

The announcement is the latest in a string of good news for SPP. In May, the Federal Government extended a sales grant to include overseas naphtha sales that previously only applied to domestic sales.

Currently, the sales grant applies to the Stage 1 Technology Demonstration Project, is capped at $36 million annually and is due to expire in 2005.

The Federal Government, which is a keen supporter of the project, congratulated SPP on its business tenacity and said the contract vindicates the Government's decision to extend the sales grant to include exports.

"At last, this new technology will get a fair trial with about two million barrels to be supplied for local refining between now and 2005. The Stuart project is a world-first and as such the demonstration plant has been subject to rigorous Federal and State environmental restrictions. It continues to satisfy those criteria," said Federal Industry Minister, Ian Macfarlane.