Rentech (RTK) is announcing this morning that they have signed a non-binding memorandum of understanding (MOU) with Beach Petroleum today to explore the development of a commercial scale manufacturing facility using Rentech’s technology to produce synthetic fuels from synthesis gas derived from Beach Petroleum’s gas resources.

Rentech’s proprietary technology converts syngas from fossil and biomass resources into hydrocarbons that can be refined into cleaner, synthetic fuels.  Beach Petroleums expansive reserves in the South Australian Copper Basin could be a major supply source to produce synthetic diesel and jet fuel.

Granted this is just an MOU which is the first step and non-binding, it’s significant news for Rentech (RTK) which had its synthetic fuel approved for jet engines back in August.

Shares of RTK are up about 10% in premarket trading.