Nova Biosource buying Iowa biodiesel refinery

Houston's Nova Biosource Fuels (AMEX: NBF) announced today it signed a deal to buy a biodiesel refinery in Clinton, Iowa.

The 10 million gallon per year refinery was designed and built by Nova for Clinton County Bio Energy.

"The Clinton County Team has demonstrated its ability to continuously produce ASTM D6751-07a biodiesel for its customers since commissioning of the plant last year," said Kenneth Hern, chairman and CEO of Nova.

Nova said that after it installs some new equipment at the plant, it plans to look into buying additional land and railroad access for a 20 million gallon per year facility expansion.

Nova said the plant was the first commercial scale biodiesel plant to use Nova's proprietary process technology.

Construction on the plant started in March 2006 and the refinery has since produced in excess of 4 million gallons of biodiesel from soybean oil and other low free fatty acid feedstocks, according to Nova.

Nova plans to modify the refinery to incorporate its pretreatment process to enable the use of a wider variety of more economical feedstocks, such as corn oil extracted from dried distillers grains, yellow and brown greases, and various blends of beef, pork and poultry fats.

The company said those feedstocks contain higher levels of free fatty acids than higher cost soybean oil.

All current plant employees will be joining Nova as full-time workers under today's agreement.

Nova currently owns three biodiesel refineries with combined production capacity of between 180 to 220 million gallons per year.

Nova said it plans to build up to seven biodiesel plants over the next three years, with production capacities ranging from 20 to 100 million gallons each.