London, 26 July (Argus) — UK renewable company Viridas is set to sign a deal with a large UK generator to supply 240,000 t/yr of energy crops.

The Leeds-based firm will supply the unnamed generator with pelletised seeds from the energy crop jatropha for power generation.

Viridas has been growing the jatropha on its own plantations in Brazil for the dual purpose of producing a commercial biofuel operation and supplying pellets to the energy sector. Jatropha trees can grow to 7m high, live for 40 years and are indigenous to South America. By crushing them, Viridas can produce biodiesel and bio-kerosine for the road and air transport industries. And the residual seed cake together with the husks can be pelletised for the electricity generating industry.

The company said the two parties have signed a strategic development and partnership agreement, which they expect to lead to an offtake deal for the supply. The company already has a major agreement in place with French refiner Ineos to supply 450,000 barrels of bio-oil over the next 10 years.

"The future signing of a biomass offtake agreement with an important major electricity generator for the annual purchase of 240,000t of biomass, coupled with the bio-oil agreement already in place with Ineos, will give Viridas gross revenue potential in the region of $1bn over the next 10 years,” Viridas chairman Stanley Wootliff said.

"Having two very credible development partners, together with $1bn of contracted forward sales, will enable us to crystallise our development programme and establish Viridas as a leading producer of truly sustainable, renewable dedicated biofuels.”

Viridas is committed to the sustainable planting and harvesting of jatropha, and say its plantations will comply with the highest levels of sustainability demanded by the EU renewable energy directive.

The company expects its plantation in Brazil to begin commercial production in 2013.

UK generator Drax said it could not comment on any supply deal until it was concluded.

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