South Perth-based renewable fuels company Australian Renewable Fuels Ltd's share price has risen over 8 per cent this morning following its announcement of a $250 million distribution agreement with South Australian-based fuel distributor Dermody Petroleum.
At 1100 WST, Australian Renewable Fuels share price was up 13 cents to $1.72.
The company signed an agreement with Dermody Petroleum for up to 45 million litres of biodiesel per annum with a guaranteed minimum volume component and has a value of up to $250 million in revenue terms for the period of the contract.
The company also announced the opening of Australia's largest biodiesel plant at Largs Bay in South Australia, the first of five plants to be rolled out by Australian Renewable Fuels by 2007.
The plant has an annual production capacity of 45 million litres of biodiesel, with the company expecting to produce 220 million litres once it completes its fifth plant.
In April, the company hopes to commence production on its second plant located in Picton, Western Australia.
Australian Renewable Fuels managing director Darryl Butcher said the agreement represented the first phase in its expansion strategy which would see Australian Renewable Fuels become Australia's largest producer of biodiesel.
"The widespread availability of biodiesel will make a tangible contribution to the reduction of greenhouse gases," he said.
"The production coming from this plant alone will abate more than 115,000 tonnes of greenhouse gases each year."
"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 a 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," he said.
