Basic Energy Corp. on Thursday announced that it is looking to supply 50 million liters of bioethanol a year to Pilipinas Shell Petroleum Corp.

In a statement to the Philippine Stock Exchange, Basic Energy said it signed a memorandum of agreement with Shell “to undertake a joint study to determine the feasibility of entering into an off-take agreement for the supply of up to 50 million liters of bioethanol a year.”

“…(I)f feasible, the result of the study would then determine the terms and conditions for a definitive agreement for the supply of bioethanol by (Basic Energy) to (Shell),” the company said.

Basic Energy earlier announced that it is looking to undertake a stock rights offering and an additional public offering to fund its expansion into biofuels and other alternative and renewable energy sources.

The company has also received approval from its shareholders to increase its authorized capital stock from P500 million to P2.5 billion, to cover the additional public offering.

“In the rights offering, we are hoping to raise P200 million and in the additional public offering, some P2 billion,” Jose Reyes Jr., Basic Petroleum executive vice president and treasurer, said.

The company will venture into a bioethanol plant that is expected to produce 200,000 liters daily in two years time in anticipation of the implementation of the Biofuels Law.

The law mandates the 5-percent bioethanol blend into gasoline by 2009, a development which will require an estimated 300 million liters per year. By 2011, the 10-percent blending mandated by law will require 600 million liters per year. – Cheryl Arcibal, GMANews.TV

Source: http://www.gmanetwork.com/news/story/71703/economy/companies/basic-energy-eyeing-bioethanol-supply-contract-with-shell