DALLAS -- Earth Biofuels Inc. has acquired Apollo LNG, Inc. from its majority shareholder, Apollo Resources International Inc., in exchange for common stock of that company.

Apollo LNG, now doing business as "Earth LNG," owns a liquefied natural gas processing facility in Topock, Ariz., that currently produces more than 80,000 gallons of transportation-grade LNG per day, and has a capacity of 86,000 gallons of LNG per day. LNG produced by the plant is sold primarily to municipal fleet customers located along the west coast of California.

"The domestic LNG business is in line with the core focus of Earth Biofuels, which is the production and marketing of clean burning alternative fuels that help reduce U.S. dependence on foreign oil," said Earth Biofuels CEO, Dennis McLaughlin.

"We believe the LNG industry will begin to see new plants supplied by stranded natural gas from sources such as landfills and dairy farm waste manure. By liquefying this natural gas and getting it to transportation markets, LNG can further evolve into a renewable, clean burning fuel," McLaughlin said.

Liquefied natural gas is produced by cryogenically transforming natural gas into a liquid state at a temperature of minus 260 degrees Fahrenheit. The LNG is then transported to markets in specialized cryogenic tanker trucks where it is used as a transportation fuel, mainly by larger vehicles in municipal fleets that use a centralized fueling facility. Earth LNG owns 14 of its own cryogenic transportation tanker trucks.

The majority of Earth LNG's customers are in California. The primary customers are municipal fleets such as Omnitrans in the San Bernardino Valley, Orange County buses and garbage trucks, Orange County Transportation (city buses), as well as commercial vehicles such as United Parcel Service in the Los Angeles area, and Waste Management's fleet at various locations up and down the California coast.

An independent fairness opinion was rendered prior to the transaction by the independent business valuation firm, Bernstein Conklin & Balcombe, who concluded that the market value of Apollo LNG was approximately $36 million, and that the consideration being paid was fair.

Transportation grade LNG is different from most imported LNG in that the former is of superior quality sufficient to be used as a fuel for vehicles, while the latter is typically of lesser quality and is re-gasified to be transported through natural gas pipelines.

Earth Biofuels produces and distributes biodiesel fuel through the company's network of wholesale and retail outlets. The fuel is sold under Willie Nelson's brand name, "BioWillie(R)." Earth Biofuels also now produces and markets liquefied natural gas (LNG). The company is focused on capitalizing on the growing demand for alternative and renewable fuels in the domestic market.

SOURCE: Earth Biofuels via Business Wire.