One of Australia's largest biofuels supply agreements, BP will receive 40 million litres of ethanol from Manildra's Bomaderry ethanol plant over the next year.

The agreement, when combined with BP's existing 15 million lietre ethanol supply deal with CSR, makes BP the country's largest marketer of biofuels.

BP is investing about $A4 million to enable the delivery, storage and blending of ethanol at its Newcastle and Parramatta terminals. The ethanol will be blended to produce a regular, unleaded petrol with up to 10% renewable ethanol that will be sold across New South Wales (NSW).

BP has been marketing ethanol-blended fuel in Queensland since 2001, and will now be able to commence the rollout to BP-branded service stations in NSW, with the fuel to be available at about 50 additional locations by the end of 2007.

Over the coming years, BP's planned rollout of ethanol-blended fuel in NSW will see this number of service stations at least double.

"Increasing the supply of biofuels is part of BP's long-term strategy to provide Australian motorists with the choice of a range of cleaner fuels," BP Australia's president Gerry Hueston said.

"Selling more ethanol blended fuel at more service stations is just one part of our strategy."

BP Unleaded 91 is a blend of unleaded petrol with up to 10% renewable ethanol; a clean, renewable fuel that is made from the byproducts of sugar cane or grain.