Ethanol plant project runs out of gas

WESTPETRO, the proposed ethanol production plant to be built in East Rockingham, changed ownership last week.

The Oswal Group, who built the Burrup fertiliser plant, has decided not to proceed with the WestPetro project.

The decision was made after it became obvious that grower direct grain contracts, with a ceiling price, would not attract the 500,000 tonnes of grain required for the plant.

Oswal will be returning its shareholding to GrainOl.

GrainOl has maintained the view that the feedstock can be secured utilising already existing grain accumulators.

Speaking in a prepared statement, GrainOl spokesperson Collette Menegola said the company had already commenced discussions with major accumulators in WA who will supply and deliver non food-grade feedstock for the WestPetro multi grain ethanol plant.

She said the varieties of feedstock would include, but not be limited to, feed wheat, feed barley, triticale and sorghum.

The distillers' grain produced from the plant is a high protein dietary supplement for the livestock industry and the ethanol produced will supply both domestic and export markets, she said.

"GrainOl is looking forward to continuing to develop the WestPetro ethanol plant and is having discussions with previously interested parties both in Australia and overseas in support of the project," Ms Menegola said.

Agricultural consultant David Falconer said WA graingrowers would make an economic decision about what grain they grew and who they sold it to.

"Economics dictate whether or not a project is successful or not," he said.

While details are sketchy, it is understood the Oswal Group was a 90pc owner of GrainOl.

Independent market analyst and MarketAg director, Mark Martin, said the difficulty with setting up the new ethanol project was always going to be the dilemma of having a fixed price contract for the grain, set far into the future.

source: fw.farmonline