Ethanol play GTL Resources says it expects production from its new Rochelle plant in Illinois to start in December.

Headed by former monk, Lloyd's insurance chief executive and banker Peter Middleton, AIM-quoted GTL, which lost a marginally reduced £6.6 million in the year to March, says the £42 million Illinois River Energy project at Rochelle project, begun in September 2005, is now likely to be ready to start producing ahead of schedule in December. The company, which raised £24 million a year ago at a lowly 1.25p to buy the project, says the plant will have the capacity to produce 50 million gallons of ethanol a year.

GTL claims several grounds for optimism, despite having to write off more than £4 million on a methanol project in Australia. The US Administration is pushing ethanol as a partial substitute for petrol, to reduce noxious emissions and provide another income stream for mid-western grain growers and ethanol prices have recently ranged between $2 and $2.5 a gallon against the $1.40 used to evaluate the Rochelle project.

Middleton says the company has applied to double capacity at the project and 'looks forward to delivering revenues throughout 2007'. He stresses the board's ambition 'to grow GTL into one of the major companies in the US production of renewable energy'.

Despite this upbeat stance, the shares remain stubbornly depressed at a weak 2.35p. The proof of the pudding should start to come in December.

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