Natural Fuels starts on Singapore biodiesel unit

08 November 2006 08:38  [Source: ICIS news]

SINGAPORE (ICIS news)--Natural Fuels, an Australia-based renewable energy firm, on Wednesday started construction on a new $130m (€101.8m) biodiesel production facility at Singapore’s Jurong Island.

The facility, which is 50/50 joint venture with Babcock and Brown Environmental Investments, will be able to produce 600,000 tonnes/year of biodiesel at the end of its first phase in end-2007, the company said.

It will take about five years to complete over three phases, and is expected to produce up to 1.8m tonnes /year of biodiesel at the end of its third phase, it added.

"The EDB (Economic Development Board of Singapore) is pleased to note that this will be the largest known biodiesel facility in the world, upon realisation," said the board’s chairman Lim Siong Guan, to a roomful of attendees during the groundbreaking ceremony.

Singapore’s proximity to palm oil plantations, which is the primary feedstock of the facility, was one of the key reasons why Natural Fuels selected the country for its latest venture, said Richard Selwood, the company’s managing director and chief executive.

"Right now, we’re standing in the middle of the world’s largest palm oil plantation within a 1,000 kilometre radius, which produces up to 33m tonnes of palm oil every year," he said.

He estimated that Natural Fuel’s palm oil feedstock requirement to biodiesel output ratio to be "one-for-one", and expects to procure feedstock from the region’s producers, such as Malaysia, Indonesia, and Papua New Guinea.

While some of the biodiesel produced will supplied to the domestic market, a large part of the output will be exported to countries such as Japan, Korea, Taiwan, and the West Coast in the US, he said.

"It’s actually more economical to ship from here to California than from Houston to California," he noted.

On how much oil prices should be before biodiesel production remains viable, Selwood said: "We’re aware of OPEC’s $60 per barrel minimum target. But anything above $40 is good for this industry. We expect average pricing (of crude oil) to be about the mid-50s (dollars)."

Meanwhile, Natural Fuel expects to produce 60,000 tonnes/year of pharmaceutical-grade glycerine as a by-product of its new Singapore plant at the end of the first phase. The plant includes a refinery which can process glycerine to 99.9% purity, said Selwood.

The company is already in talks with other firms to supply the glycerine for applications such as cosmetics, skincare, and solvents, he added.

Headquartered in Perth, Western Australia, Natural Fuel set up its first production facility in Darwin with a production capacity of 147m litres/year of biodiesel and 12,960 tonnes/year of glycerine.

According to Selwood, the company is talking to "more than one" global petrochemical major to develop other similar plants in Rotterdam and Houston. He did not provide further details on these plans.

By: Jeanne Lim
+65 6780 4359

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