Shares in Osborne Park-based Mission NewEnergy were higher after it struck an offtake and equity deal with US company Valero Energy Corporation that could generate more than $US3.5 billion for the company.
Both companies have entered into a binding agreement whereby Mission NewEnergy will supply up to 200,000 tonnes of biodiesel each year for five years to Valero.
Valero has the right to double that amount to 400,000 tonnes per year and to extend the term by an additional five years, Mission NewEnergy said.
Mission NewEnergy will supply the biodiesel from its captive Jatropha feedstock, which is processed at its refinery in Malaysia.
The offtake deal represents gross revenue potenital of more than $US3.5 billion to MissionNewEnergy, at prevailing prices.
Additionally, Valero will take a 25 per cent equity interest in Mission NewEnergy through the issue of 81.41 million warrants prived at 45 cents each and expiring in August 2010. Mission NewEnergy said if the warrants are fully exercised, it will provide the company with $36.6 million.
Both transactions are subject to shareholder approval.
Shares in Mission NewEnergy climbed four cents to 39.5c at 13:32 AEDT.