Grain handler and marketer CBH Group has signed a ten-year agreement with ethanol producer Primary Energy to supply grain to its $180 million Kwinana biofuel facility.
Grain handler and marketer CBH Group has signed a ten-year agreement with ethanol producer Primary Energy to supply grain to its $180 million Kwinana biofuel facility.
The ethanol plant will consume 500,000 tonnes of grain per year, and produce about 160 million litres of biofuel.
The facility will also produce aqueous ammonia, organic fertiliser, and up to 23 megawatts of electricity, and is expected to be operational by the third quarter of 2009.
CBH will begin supplying grain in the 2008-09 harvest.
New South Wales-based Primary Energy received EPA board approval and state government consent in late July, and has also signed a memorandum of understanding with BP Australia to distribute the entire output of the plant as a fuel-ethanol blend.
Primary Energy are also looking to develop bio-energy refineries in New South Wales and Queensland, as well as Western Australia.
The full text of a joint CBH-Primary Energy announcement is pasted below
The CBH Group's grain marketing arm, Grain Pool Pty Ltd today signed an historic ten year agreement to supply grain to Primary Energy's proposed bio-fuel facility in Kwinana, with accumulation set to commence during the 2008-09 harvest.
The Primary Energy plant will consume up to 500,000 metric tonnes of grain, primarily wheat and barley, and produce at least 160 million litres of ethanol for blending into local fuels to be distributed by BP. The plant will also produce over 100,000 tonnes of semi organic broad acre fertiliser and other protein based co-products for export and domestic use.
Ethanol from the plant should also prove a real environmental winner for West Australian motorists with the carbon equivalent of over 90,000 cars removed from our roads each year as a result of using ethanol blended fuels.
Grain Pool Pty Ltd General Manager Dr Andy Crane said the supply agreement would expand the domestic grain market options for Western Australian grain growers.
"Accumulation for the bio-fuel industry is a critical and emerging market for the grains industry," Dr Crane said.
"Unlike grain for food production, the grain that is used to produce bio-fuels requires less protein and more starch, so this in itself opens up an alternative pathway to market for those growers who are able to produce high yielding crops with lower protein levels.
"This is particularly pertinent for grain producers on the fringes of Western Australia's grainbelt and potentially provides further opportunities for the development of new varieties in this state.
"Grain Pool Pty Ltd has an excellent working relationship with Primary Energy and has established an outstanding agreement that secures supply for the ethanol plant and a long-term market for Grain Pool Pty Ltd and Western Australian growers.
Dr Crane said the ethanol plant would be located directly adjacent to the CBH Group export terminal in the Kwinana industrial area and it is intended the plant will be serviced by a conveyor link direct from the CBH Kwinana Grain Terminal.
"This arrangement capitalises on the bulk storage and handling infrastructure already available in Kwinana, reduces the heavy traffic in the area and ensures the most efficient logistics are available to the Primary Energy facility."
Primary Energy Chief Executive Officer Matthew Kelley said the Primary Energy plant would be operational by the third quarter of 2009.
"The security of supply of grain to this plant is a critical business risk that must be managed in an effective and commercial fashion.
"The agreement with Grain Pool Pty Ltd helps to ensure the commercial viability and long-term security of the Kwinana ethanol plant."
The CBH Group is Western Australia's leading grain storage, handling and marketing organisation.
Primary Energy is an Australian renewable energy company currently developing Bio-Energy refineries in Western Australia, New South Wales and Queensland.
