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AR Fuels wins $200m sales agreement
23/05/2006 By: Nicholas Grove

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Australian Renewable Fuels Limited (ARW) has signed a sale agreement with Western Australian based fuel distributor Westfuel. The agreement, which is for a four-year term, is for up to 45 million litres, or the entire production capacity of ARFuels’ forthcoming Picton plant, with a guaranteed minimum volume component, the biodiesel producer said today.

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At current spot price this contract has a value of up to $200 million in revenue terms for the period of the contract and is the second major sales agreement announced by ARFuels in as many months.

On 23 March ARFuels announced a five-year, $250 million sale agreement with South Australian fuel distributor Dermody Petroleum.

ARFuels managing director Darryl Butcher said the deal was a testament to the high quality of the company’s product and confirms the rapidly growing appeal of biodiesel as a renewable option for fuel.

“ARFuels is well advanced in its strategy to roll out a series of five plants in Australia with our second plant at Picton in Western Australia at advanced commissioning stage and the entire production from both plants already locked in to local sales,” Mr Butcher said in a press statement.

The sales agreement follows the recent announcement of the company’s expansion into the US following an agreement to purchase Energea’s biodiesel technology patents for the NAFTA Zone, encompassing the United States of America, Canada and Mexico.

ARFuels plants us Energea technology. Energea is a technology provider in Europe and has constructed the world’s largest biodiesel plant in the United Kingdom.

Fat is the principal feedstock in biodiesel production and ARFuels said it has exclusive five-year feedstock supply agreements in South Australia and Western Australia with Gardner Smith, a company that deals in the delivery and storage of fats in Australia.

Westfuel is a fuel distributor with over 25 years experience and distributes fuel in the south of Western Australia.

At 1114 AEST, shares in Australian Renewable Fuels were 4c higher at $2.10.