PETALING JAYA: Asia Bioenergy Technologies Bhd (AsiaBio), via associate Nexfuel Ltd, is targeting to construct up to three fuel production plants costing US$70mil (RM230.9mil) each, and securing the offtakers by the first half of the year. The plants will have a capacity of 10 million gallons each.
AsiaBio is in talks with a couple of plantation companies and is hoping to construct two plants in Johor and one in Pahang. The first plant is targeted to be set up by 2016.
Executive director Looi Kem Loong (pic) told a press conference that funding for the plants would be on a joint basis between AsiaBio and the plantation company it was partnering. AsiaBio was looking to have an equity stake of at least 20% in each plant.
The counter closed up one sen to 13.5 sen on a volume of 15.5 million shares.
Earlier yesterday, AsiaBio signed a plant construction agreement with US-based clean technology company Cool Planet Energy Systems Inc that would allow it to use Cool Planet’s technology to develop fuel production plants in Malaysia.
Cool Planet converts biomass feedstock into oil (high octane RON105) and biochar, a soil enhancer. This is done via a carbon negative process, in which Cool Planet holds some 16 patents.
Nexfuel and Cool Planet intended to use local feedstocks like empty fruit bunches from palm oil mills for the Malaysian plants.
“In the United States, we use pine trees as our biomass. Coming to Malaysia was a natural choice as Malaysia is a mecca for biomass. With our technology, we are no longer subject to the fluctuating prices of oil. Our cost for producing fuel is fixed, at RM1.30 per litre, whereas typical jet fuel is produced at a price of RM3 per litre when oil is at US$90 per barrel,” said Cool Planet vice-president of strategic planning and assistant to the chief executive officer Vital Aelion.
Under the plant construction agreement, Nexfuel will be responsible for the securing of the funding, feedstock permits and the approval required to build the Cool Planet Green Gasoline plants in Malaysia with its identified partners. Cool Planet will receive a royalty from the profits derived from each plant.
“We will secure the offtakers before tying up with the plantation companies to set up the plant. We intend to put biochar into our existing product, a microbe we have branded under the name ‘Artisan’. These microbes are now being sold to Pertubuhan Peladang Kawasan,” said Looi.
Aelion added that potential offtakers for the Malaysian plants were the existing shareholders of Cool Planet.
“They have more or less agreed to take up 100% of the fuel that we produce,” he said.
Shareholders who have funded Cool Planet since its inception five years ago included Google Ventures, British Petroleum, ConocoPhilips, NRG and Exelon, among others, who have put in a collective US$50mil (RM160mil).
For the nine months to Oct 31, 2013, AsiaBio was still in the red with a reduced net loss of RM914,000 from RM2.23mil previously. This was on the back of a 4.9% increase in revenue to RM1.43mil.