A FUEL producer has announced its second major contract win in less than a week.

D1 Oils, of Stockton, is to build a biodiesel refinery in South Africa.

Under the deal, Rolls-Royce will finance the Durban plant, which is expected to be operational by the summer.

It will be capable of producing eight million litres of biodiesel a year from crude vegetable oil, extracted from the seeds of the jatropha tree.

D1 chief executive Philip Wood said: "This is the culmination of more than two years hard work by the D1 team in partnership with Rolls-Royce.

"It is a key component of our plan to commence refining operations in South Africa in 2005 and develop an indigenous supply of feedstock.

"The whole project, when on stream, will assist the South African government to meet its commitment to the Kyoto Protocol."

Last week, D1 agreed a joint venture with Saudi-based Jazeera For Modern Technology.

D1 has also announced it is to contest a High Court writ claiming it owes a troubled Teesside company £725,000.

The claim arises from a dispute over payment for services and intellectual property rights with Safety Issues Fabrication.