Kroger to sell VeraSun ethanol at the pump in Texas

Brookings, S.D.-based VeraSun Energy (NYSE: VSE) said today Cincinnati's Kroger (NYSE: KR) would sell VeraSun's 85 percent ethanol blend in Texas.

Kroger will offer VeraSun's E85 blend at 20 of its convenience store locations in and around the Dallas and Houston metro areas.

"The combination of an established Kroger brand with our emerging VE85 brand is important as we continue to expand to new markets," said Bill Honnef, Sr. VP of strategic initiatives at VeraSun.

"There is a growing demand for E85 in the United States as the number of flexible fuel vehicles on our roads increases, and having a partnership with a national retailer like Kroger adds tremendous value to our initiative of increasing overall E85 availability."

Last November, VeraSun, the No. 3 ethanol producer in the U.S., announced that it would acquire St. Paul, Minn.'s US BioEnergy (Nasdaq: USBE) in an all-stock deal (see VeraSun to buy US BioEnergy).

The acquisition is expected to give VeraSun a total of nine ethanol plants, and seven under construction, boosting its capacity to more than 1.6 billion gallons per year by the end of this year.

With today's deal, VeraSun said it now has more than 140 retail fueling stations in 13 states and the District of Columbia.

VeraSun and Kroger initially partnered last August 2007, opening VeraSun fueling locations at 20 Kroger convenience stores primarily in Ohio.

VeraSun said its E85 blend is now available at 44 different Kroger fueling locations in four states.