Jun 18 11:33 AM - The Department of Alternative Energy Development andEfficiency and TMB Bank have signed an agreement to conduct a feasibilitystudy on a prototype biodiesel production complex in Krabi for 300 millionbaht.

The venture is part of the government's plan to develop 85 commercialbiodiesel production plants nationwide by 2012, with combined investmentof 29 billion baht.

Energy Minister Viset Choopiban said the Krabi plant would have aproduction capacity of 100,000 litres per day, be owned by a local oilpalm co-operative. The southern province is the country's biggest sourceof palm oil, with 630,900 rai under production, producing three tonnes ofoil per rai per year.

The 45-day feasibility study would cover pricing, marketing, supportingindustries and finances, said Mr Viset. If the biodiesel project isdeclared commercially viable, construction would begin, aiming atcompletion within 18 months, with financial support to be provided by TMB.

Siriporn Sailasuta, the department's director-general, said the Krabiproject would be the first of three commercial biodiesel plants this year.The details of the other two projects have yet to be completed.

The study is to determine by July whether the region can producegovernment-specified biodiesel B5, a mix of 5% palm and 95% diesel.

TMB president Subhak Siwaraksa said the bank would study the technical,marketing, investment and finances of the project and report to the EnergyMinistry.

''If this project succeeds, it will be a prototype for the other 85biodiesel production projects under the government's strategic plan,[which will have a] combined investment of 29 billion baht in 2012,'' hesaid. ''Those biodiesel plants will reduce the country's petroleum importby at least 100 billion baht a year.''

The Charoen Pokphand Group (CP) has expressed interest in invest in aproposed biodiesel production complex. The company is scouting for anappropriate location, possibly in the South.