Jatoil to increase Indonesian holdings

Posted Sept. 29, 2010

Jatoil Ltd. announced on Sept. 28 that it is moving into the second stage of development with its joint venture, PT Jatoil Waterland, which will effectively double its jatropha land holdings in the Central Java, Indonesia, to 1,000 hectares (2,471 acres). According to the company, nurseries to grow jatropha seedlings will be established in the coming weeks. It is currently expected that those seedlings will be planted in November.

The proprietary jatropha strains utilized by the joint venture have been specifically selected for high yield, pest resistance and regional acclimatization, said Tony Crimmins, Jatoil's business development manager. "Initial crosses resulted in 1 [metric ton] of oil per hectare," he continued. "With the application of selection techniques we now can achieve 2 to 2.25 tons per hectare. Naturally, this is a condition of soil fertility and rainfall. We expect continued growth in the yield of jatropha, and there is a belief that this could double over the next 5 years with the application of cloning and hybrid techniques." While Crimmins said jatropha has a long way to go before it is fully optimized, he is confident that the current strain is suitable for use as it is a cross between local jatropha and a Vietnamese variety.

Jatoil's joint venture has additional plans to increase its holdings to 10,000 hectares within the next 12 months. As with all new projects, Crimmins said developing the systems and building relationships is what takes the most time. "We have come through the initial stage and can start planning the next 8,000 hectares," he said. "The main obstacle to developing these fields is capital, as there is enough jatropha parent stock available to prepare for another mass plant-out, and tried information and management systems to ensure it is done correctly."

The initial stage of PT Jatoil Waterland's project was completed three months ago. It involved the purchase of land planted with two-year-old trees. Those plants have already been harvested. In July, the resulting oil was shipped to an international consortium of airline companies for use as jet fuel. "The initial shipment was a small 10-ton quantity to prove the supply chain," Crimmins said. "The oil was filtered below 5 microns and stored in a container to remove oxygen so that the shipment arrives clean with low fatty acids." Jatoil expects to have a more consistent supply of the oil beginning in February 2011, with substantial exports beginning in late 2011, he continued.

Jatoil does not currently plan to sell its jatropha oil into the biodiesel market. Rather the company will initially focus on the aviation and power generation markets. "Aviation is a significant growth market, as it will require significant quantities to liquid fuels for decades to come, and there are a limited number of candidate alternative fuels," Crimmins said. "Our business motto is to follow the greatest profit, and�the aviation industry shows the best potential." However, he also noted that Jatoil is looking at alternative oil-bearing crops for possible sale into the biodiesel market.