updated 6/25/2007 5:40:49 PM ET 2007-06-25T21:40:49

Tyson Foods Inc., the world’s largest meat producer, announced Monday its second joint venture to make synthetic fuel out of leftover fat from beef, pork and chicken.

Tyson and Tulsa, Okla.-based Syntroleum Corp. said they will spend $150 million to build the first of what could be several plants to refine animal and vegetable fats into diesel, jet fuel and fuel for the military. It is the second such venture Tyson has announced in the past two months.

Tyson Chief Executive Richard Bond said the joint venture with Syntroleum was part of Tyson’s effort to become a leading player in the renewable energy business.

“This is a new business that is focused on adding value by turning fat and other byproducts into fuel,” Bond told reporters on a conference call.

Tyson, based in Springdale, Ark., created a renewable fuels division last year and in April announced its first venture, a deal with oil company ConocoPhillips to produce and market diesel fuel for U.S. vehicles using beef, pork and poultry fat.

The new venture with Syntroleum calls for a first plant to be opened next year to produce 75 million gallons of synthetic fuel each year.

The site for the plant hasn’t been announced but the companies say it will be in the south central United States. The plant will have 65 workers.

Each company will have an equal stake in the venture. Tyson will supply animal fats, greases, and vegetable oils that will be the basis for the fuel. A news release by the companies touts its planned products as “ultra-clean, high quality, next generation renewable synthetic fuels.”

The plant will use Syntroleum’s patented “Biofining” process in producing the synthetic fuel.

“Our venture with Tyson affords us the opportunity to apply part of our established portfolio of technologies to produce next generation ultra-clean renewable synthetic fuels that contribute to our nation’s energy independence while helping reduce greenhouse gas emissions,” Syntroleum president Jack Holmes said.

The companies say the fuel is expected to be compatible with current pipelines and storage facilities. The companies say the fuel will produce almost no sulfur emission, will have greater combustibility and will have better thermal stability than other fuels, a plus for military use.

Conventional fuels will be able to be blended with the fuel produced by the joint venture, called Dynamic Fuels, the companies said.

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