Valero Closes Sale of Last of Seven Former VeraSun Ethanol Plants

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Researched by Industrial Info Resources (Sugar Land, Texas)--Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) has closed the sale of the last of seven former VeraSun Energy Corporation (OTC:VSUNQ) (Sioux Falls, South Dakota) plants. The plant is in Albion, Nebraska, and produces 110 million gallons of fuel ethanol annually.

In March 2009, Valero bid $477 million for the seven plants for an average asking price of $68 million -- a steal, as the average plant of that size would cost more than $200 million. With the acquisition, the oil refiner picked up 640 million gallons of existing capacity and 110 million gallons of a site under development in Reynolds, Indiana. The second closest bidder was ag giant Archer Daniels Midland Company (NYSE:ADM) (Decatur, Illinois).

The plants are located in Aurora, South Dakota; Charles City, Fort Dodge and Hartley, Iowa; Welcome, Minnesota; and Albion, Nebraska. The purchase of the plants gives Valero a dedicated supply of fuel ethanol for blending under the Renewable Fuels Standard.

The Albion plant is currently not operating but the company plans to have the plant restarted by June 2009. It is not clear when construction will resume on the Reynolds project.

Industrial Info's Ethanol Database provides a comprehensive outline of all current development activities in the emerging alternative fuels market. This database covers 177 ethanol plants in operation and 530 plants under development. It also covers 145 operational biodiesel plants and 245 biodiesel plants under development.

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