Mission NewEnergy has struck a 10-year supply deal worth up to $3.5 billion for its biofuel production with the US's largest independent crude oil refiner and marketer, Valero Energy Corp.

In a deal that effectively underwrites its soil-to-oil strategy, including the building of its second biodiesel plant in Malaysia, Mission has also offered Valero a 25 per cent stake in the company at a sharp premium to the pre-deal price.