US-based bio-fuel company Aurora Algae is set to launch a $300m facility in Karratha, Western Australia in 2014, citing it as an ideal location for algae-to-biofuel conversion.

Besides being a perfect climatic country for micro-algae production, the company is planning to leverage the surging demand for energy in Australia.

Aurora Algae marketing manager Paul Brunato told ABC that the company had carried out a $10m pilot study over the last three years that has validated the viability of production based on algae Nannochloropsis.

"What we’ve learned is we can grow algae at tremendous rates here in the Pilbara," Brunato added.

Although the company grosses its majority of profits from Omega oil, it is planning to subsidize the bio-fuel production in a bid to achieve the targets set for the sector.

"We can sell biofuel for market price no matter what it is and be profitable based on the omega-3s," noted Brunato.

"What we see when we look out over the desert area here is potentially the next Saudi Arabia of biofuel production."