Mission NewEnergy, the Perth-based maker of jatropha and palm oil-based biofuels, anticipates to start supplying about 1.5 million barrels annually to Valero over the next few months, a little less than two years after the contract was initially announced.
“We are waiting to be EPA-certified before shipping barrels to Valero, ” James Garton, president of Mission’s U.S. unit. Fully executed the five-year contract is worth $3.5 billion.
He expects EPA approval by year-end. When the two companies inked the contract back in 2009, Mission had anticipated supplying Valero by mid-2010. Mission will supply Valero refineries with a combination of jatropha and palm oil-based biofuels produced at its refinery in Malaysia. Also, last month Mission raised a little more than $25 million as part of a U.S. share offering. Garton says the money will help double its jatropha acreage at its southern and central India production sites to 400,000 acres over the next three years. Chardan Capital Markets, Rodman & Renshaw, Northland Capital Markets and Maxim Group underwrote the NASDAQ listing. Jatropha is an energy-rich inedible plant that can grow in nutrient poor soils.
In 2007 — at the height of the biofuel bubble — British oil and gas major BP formed a $128 million joint venture with jatropha grower D1. Two years later BP pulled out, as the venture did not meet production targets. Since launching in 2006, Mission NewEnergy has invested some A$140 million ($142 million) to prop up its refining business.