BP Australia and Manildra Energy Australia have announced one of Australia's largest biofuels supply agreements, a deal that will result in nearly half of BP's fuel sales in New South Wales containing renewable ethanol.

BP will receive 40 million liters of ethanol from Manildra’s Bomaderry ethanol plant over the next year, with deliveries to commence in August 2007. Both BP and Manildra have also started negotiations to extend the agreement for a further two years.

According to BP, the agreement with Manildra, combined with its existing 15 million liter ethanol supply deal with CSR, makes it the largest marketer of biofuels in Australia.

BP is investing approximately A$4 million to enable the delivery, storage and blending of ethanol at its Newcastle and Parramatta terminals. The ethanol will be blended to produce a regular, unleaded petrol with up to 10% renewable ethanol that will be sold across New South Wales (NSW).

BP has been marketing ethanol-blended fuel in Queensland since 2001, and will now be able to commence the rollout to BP-branded service stations in NSW, with the fuel to be available at about 50 additional locations by the end of 2007. Over the coming years, BP’s planned rollout of ethanol-blended fuel in NSW will see this number of service stations at least double.

BP Australia president Gerry Hueston said: Increasing the supply of biofuels is part of BP’s long-term strategy to provide Australian motorists with the choice of a range of cleaner fuels…Selling more ethanol blended fuel at more service stations is just one part of our strategy.

BP Australia also announced that its BP Unleaded 91 offering will be introduced for the first time into BP-branded service stations in Newcastle. Initially, there will be 14 BP-branded service stations selling the new fuel, with eight other sites in Newcastle to be ready by the end of August.

BP Unleaded 91 is a blend of unleaded petrol with up to 10% renewable ethanol; a clean, renewable fuel that is made from the byproducts of sugar cane or grain.