wild places | wild happenings | wild news
make a difference for our wild places

home | links | search the site
  all articles latest | past | articles by topics | search wildnews
wild news on wildsingapore
  Business Times 17 Oct 07
Natural Fuel's biofuel plant here to switch feedstock
Australian listed firm signs deal for jatropha oil as palm oil prices surge
By Ronnie Lim

A SPIKE in regional oil palm prices has forced the world's largest biofuels plant being built on Jurong Island to switch to using an alternative feedstock instead - jatropha from Madagascar.

Australia's Natural Fuel Ltd (NFL) - whose phase 1 of its US$130 million Singapore plant is scheduled for completion this year-end - yesterday said it signed a letter of intent for a long-term offtake agreement with GEM BioFuels plc for supply of crude jatropha oil for its biodiesel facility here.

GEM has the rights to over 450,000 ha of land in southern Madagascar, with an initial planting programme for 200,000 ha. Based in the Isle of Man, the company which manages the jatropha plantations and the extraction of the vegetable oil from the seeds, currently has 13,000 ha under cultivation.

Natural Fuel's off-take agreement will allow for supply of up to 55 per cent of GEM's crude jatropha oil production in Madagascar at a FOB delivery price of US$500 per tonne.

This is significantly cheaper than palm oil prices which had spiked to over US$700 a tonne, well above the US$600 per tonne price of diesel which it was supposed to replace, BT earlier reported in July. This has hit the economics of many regional biofuels projects.

In its announcement to the Australian Stock Exchange yesterday, copied to the SGX here, Natural Fuel said it will also subscribe £pounds;650,000 (S$1.9 million) to secure 3.9 per cent equity in GEM which is listing on the Alternative Investment Market in the UK this month.

Natural Fuel's CEO Earl McConchie said: 'This partnership will allow NFL to lock in a substantial long- term supply of crude jatropha oil at a very favourable price and represents the first key step in our ongoing feedstock strategy.'

'As the amount of jatropha oil being supplied by GEM increases each year, the underlying strategy and pricing will deliver greater operating profits to NFL,' he added.

Beginning in early- 2009, GEM will initially supply 2.5 per cent of NFL Singapore's production requirement, with supply increasing year-on-year as its jatropha programme develops.

NFL earlier said that the first 600,000 tonnes phase of its Jurong Island plant will be completed by end-2007, with its two later phases - bringing total capacity to 1.8 million tonnes - expected to be ready by 2012.

GEM's CEO Paul Benetti said that 'at the maturity of GEM's current plantation programme in 2013, the agreement will secure up to 25 per cent of NFL's production requirements in Singapore'.

'GEM's existing land holding for jatropha plantations in Madagascar surpasses 450,000 ha. When fully mature, these plantations could provide up to 50 per cent of NFL's Singapore feedstock requirements,' he added.

Last November, when NFL broke ground for its Singapore plant, officials earlier said that one important consideration for siting here was the deepwater port and excellent logistics which allowed for reliable import of raw materials like palm oil from Malaysia, Indonesia and Papua New Guinea.
links
Related articles on Green energy
about the site | email ria
  News articles are reproduced for non-profit educational purposes.
 

website©ria tan 2003 www.wildsingapore.com