Renewable Development Australia is planning to tap the growing global market for bioethanol with an A$800 million ($598 million) project that will use purpose-grown feedstock to produce 344 megaliters/year of fuel, a company spokesman said Friday.
RDA is currently seeking expressions of interest from potential investors to partner the Pentland project in the state of Queensland.
The company is targeting financial close for the project in the third quarter of 2016, with construction expected to be completed in the fourth quarter of 2018, said company secretary Owen Self.
The project will comprise an integrated sugar cane and sorghum farm and ethanol plant, with an associated co-generation power plant.
"The project is unique because it integrates feedstock production with ethanol production under one corporate structure, making the project independent of, for example, market fluctuations in world sugar prices," Self said.
"This means input costs are controlled and stable, de-risking the cost of production and hence the pricing. This, coupled with the scale of the project and the use of advanced farming technology, will make the project one of the lowest-cost producers of fuel-grade ethanol in the world."
The project's production will be exported through the Queensland port of Townsville.
Self said RDA had signed a 15-year offtake deal with a US trading company for the project's output.
According to the company, the global bioethanol market is forecast to grow to 145 billion liters in 2022, from 98 billion liters in 2015.
The Australian government has invested A$3 million to assist RDA in bringing the project to a financial close.
The construction cost of the project is to be funded via a combination of debt and equity.
Queensland is already home to two ethanol production facilities with total nameplate capacity of 150 ML/year.
Another two plants are in the planning stage in the state, which would add around another 150 ML/year of capacity.
