The assets considered for the acquisition include a 100-million gallon biomass-based diesel refinery and deepwater port terminal at the Port of Grays Harbor, Washington, US.

Under the terms of the agreement, Imperium will divest all of its assets to REG for $15m in cash and receive 1.5 million shares of REG common stock.

The deal allows Imperium to retain its $25m net working capital while REG will assume debt of $5.2m.

REG president and CEO Daniel Oh said: "As we combine our companies, we will expand the reach of REG along the west coast, including production and distribution.

"We already sell into these markets as they have responded to the call for more clean, advanced biofuels through low carbon fuel standards.

"This will enable REG to be more efficient and timely in our delivery and improve our supply assurance."

The biorefinery will be renamed as REG Grays Harbor upon completion of the transaction.

As per the deal, Imperium will also have provision to receive up to $0.05/gallon payment for biomass-based diesel produced and sold, for two years after completion of the transaction, which is subject to satisfaction of customary closing conditions

Imperium Renewables president and CEO John Plaza said: "We hope our facility will help them continue to grow and diversify biofuel production and sales both locally and around the region."

REG currently operates ten biorefineries across the US.