The plant, in Hankinson, southeastern North Dakota, has production capacity of 378 million litres a year.

It began operation in July 2008, but was 'idled' three months later, several weeks before VeraSun filed for bankruptcy protection. AgStar Financial Services, based in Minnesota, brought together a group of lenders that took over some of VeraSun's ethanol refineries, including the one in Hankinson.

"Given the current ethanol mandates and our subsequent blending needs, having more of a presence in the supply chain better balances our business," says David Wood, president and chief executive of Arkansas-based Murphy Oil, which has US upstream and downstream operations.

Wood says that Murphy will invest a further $15m to get the refinery back in operation as soon as possible. A statement from North Dakota Governor John Hoeven's office says the plant could resume production this weekend.

The 2007 Energy Independence and Security Act mandates that 136 billion litres of ethanol a year must be blended into fuels by 2022. Of that amount, 56 billion litres must be grain-based ethanol, up from nine billion in 2008, with the balance comprised of cellulosic and advanced biofuels.

Regardless of the feedstock, refiners, importers and non-oxygenate blenders must meet the new guidelines, except gasoline producers in Alaska, Hawaii and non-continental US territories.