SQC, a technology development firm, has partnered with the universities to enable them to produce commercial quantities of biofuels from algae.
Murdoch University professor of marine phycology Michael Borowitzka and the University of Adelaide senior lecturer at the school of chemical engineering David Lewis are world leaders in the development of biofuels from micro-algae.
The work of Professor Borowitzka and Dr Lewis led to the establishment of a $3 3 million algae pilot plant in Karratha, Western Australia.
"Our research team has proven that it is possible to grow large quantities of algae for commercial biofuel purposes," said Professor Borowitzka.
"The establishment of Muradel is the next major step in Australia becoming a world leader in biofuel production."
Dr Lewis said SQC had contributed $1 million to the algal biofuels venture, despite the fact it was a "high-risk investment".
"They were willing to invest because we developed credible data that could be substantiated and supported," he said.
"They studied the business (and) felt confident to link with us."
Murdoch University specialised in commercial production of algae and algal products, while the UoA contributed engineering expertise in algal processing.
SQC's mission was to develop commercial processing of micro-algae biomass into renewable hydrocarbon products.