Earth Biofuels has announced today that its wholly owned subsidiary Earth Ethanol, Inc. has entered into an agreement with Liquafaction Corporation to construct and operate an ethanol production facility located near Moses Lake, Washington. Earth Ethanol will beneficially own 80% of the facility, which is projected to produce approximately 36 million gallons of ethanol per year by the end of 2007. 

The project is a renovation and expansion of an existing ethanol plant built in 1992 with an original capacity of approximately six million gallons per year. The facility will be upgraded with state-of-the-art processes and controls and will be able to process both corn and barley as feedstock for the ethanol production.

Moses Lake is located in Grant County, the largest corn-producing county in the state of Washington, and is adjacent to the largest barley producing counties in the state. The ability to operate on two grains will help to reduce the exposure to rapidly changing corn or barley prices.

“The estimated production capacity of this facility is in line with our objective of having an annualized ethanol production rate of at least 30 million net gallons by the end of 2007,” said Earth Biofuels’ Executive Vice President, Kit Chambers. “With the strong ethanol market on the west coast and specifically in Seattle, we believe this is a great opportunity for Earth Ethanol.”

Production at the facility is expected to increase incrementally – from an initial 12 million gallons per year in June of 2007 to 36 million gallons per year by November 2007.

In addition to Earth Biofuels’ controlling interest, it will manage operations at the Moses Lake facility.