VOLGA, S.D. (AP) - Plans have been announced to build one of the nation's largest biodiesel refineries at Volga, according to South Dakota Soybean Processors.

The 40-million-gallon High Plains Biofuels refinery would be next to the group's soybean processing plant on the east side of town. SDSP is working with Transocean Group Holdings Propriety Ltd., of a Sydney, Australia, on the refinery project.

Backers say the refinery could be up and running by the first half of 2008 if the permit process and construction don't encounter major snags.

The Australian firm will provide money and strategic advice, while SDSP will provide the project management and the work force, said Rodney Christianson of Brookings, chief executive officer for SDSP.

As the plant goes on line, it will need another 15 people for administration and production, according to Christianson.

Minnesota Soybean Processors' 30-million gallon plant is the largest plant now, and Cargill plans a 38-million gallon refinery, Christianson said.

Adding a biodiesel refinery "is another great opportunity for us to move down the value-added chain," he said.

"Oil from the Midwest rather than from the Middle East - we believe that's a good thing."

South Dakota Soybean Processors, now in its 10th year, operates an 80,000-bushel per-day soybean processing plant and soybean oil refinery and has branched into other soy product areas.

Biodiesel is a generic term for any clean-burning alternative fuel made from domestic, renewable resources. Soybean oil is the primary component for biodiesels now made in the United States.

In North Dakota, the Archer Daniels Midland Co. is building a biodiesel plant at Velva, and the North Dakota Farmers Union-backed Dakota Skies Biodiesel LLC is planning a biodiesel facility at Minot.