Jatoil Limited's mission is to be a socially, environmentally and economically sustainable producer of renewable energy, based, initially, on establishing projects in Asia to grow jatropha.
JatOil inks MOU with PT Waterland over biofuel feedstock in Java
Renewable energy company Jatoil (ASX code: JAT) has signed a key Memorandum of Understanding (MOU) with a leading European-backed jatropha biofuel producer, PT Waterland International.
The MOU outlines a potential transaction that would involve Jatoil buying a controlling interest in 1000-2000 hectares of established jatropha farming ventures in central Java, with plans for considerable expansion and short-term revenue generation. Jatoil will now undertake a formal due diligence process in relation to the potential transaction and will keep the market informed of its progress.
JatOil Chief Executive Officer Phil Hodgson said of the MOU, “Jatoil has been carefully looking to use its cash reserves to buy into world-class, sustainable energy projects that can meet stringent financial hurdles and provide sustainable returns to investors.”
Hodgson said, “If our due diligence on the Asian [deal] goes well, we expect completion of the deal during the next couple of months.”
PT Waterland is a Dutch-Indonesian consortium that has developed extensive jatropha operations in central Java to supply European power markets. It has 12,000 hectares of oil producing farms and a further 60,000 hectares that have been planted during the past 1-2 years.
JatOil Business Model
JatOil's business model is based around becoming producers of Jatropha oil, and subsequently biodiesel, through partnerships with Jatropha growers in Asia and selling the final product to Europe, America and Asia.
The company would aim to supply rising international demand for biofuels by growing and selling low-cost biodiesel feedstock overseas. Jatropha oil - is derived from a low-cost, high-yielding, fast-growing, plant of the same name.
Importantly, the plant is also non-edible, unlike other biofuel sources such as soya bean, so it does not compete with human food, the company said.
The first deal for JatOil is an agreement with GreenEnergy Biofuels (GEB) to produce biofuel feedstock in Vietnam. This expanded Jatoil’s capacity and presence in the production of renewable energy from the hardy perennial tree, Jatropha curcas.
If completed, the Waterland venture would give Jatoil another important production centre in Asia to add to the existing Vietnamese joint venture operations. The biofuel operation in Vietnam is currently being expanded, with contracts being signed with farmer co-operatives. Nurseries have been established to provide seedlings for the planting of the expansion area in the southern province of Ninh Thuan, which will occur from August to December 2009.
Jatoil continues to review its opportunities in the Philippines with the appointment of a field operations manager, Ger Groeneveld. The studies being conducted by Mr Groeneveld have a strong slant on power generation using jatropha seedcake and other available biomass sources.
