A biofuels company is considering making a multi-million pound investment in the region, The Northern Echo has learned.

The company, which has not been named, is due to start a feasibility study in a matter of weeks.

Somerset-based Wessex Grain is also known to be looking at sites on Teesside where it hopes to build a bioethanol plant, converting wheat into ethanol, also known as ethyl or grain alcohol, which can be mixed with petrol to make biofuels.

Wessex is building a plant in Kent and is also carrying out a feasibility study that could lead to 200 jobs at a plant in Teesside.

Another six companies have expressed an interest in becoming involved in what could become a cluster of biofuels companies in the region.

If the unnamed company goes ahead with building a plant, it could create about 70 jobs directly and another 200 in the supply chain.

Dermot Roddy, from Renew Tees Valley, an organisation working to attract renewable energy companies to the region, said: "At the moment, we have six or seven open inquiries that are to do with the potential of biodiesel or bioethanol plants on Teesside.

"They are all wanting to come here because they see the petrochemical industry as a target. There is the potential to grow their feedstocks nearby, because the region has an export surplus of wheat, and they see the advantage of having Teesport so close to import or export goods.

"They have also been watching closely the Biofuels Corporation and D1 Oils, which have both chosen to base themselves on Teesside.

"And just last week, I came across another company that is interested in the whole concept of bioethanol in the region and we will be helping them with a feasibility study soon."

Renew Tees Valley predicts that the sector will be worth £2bn to the North-East economy and employ more than 10,000 people within five years.

Business leaders are approaching biofuels and renewable energy companies around the world, convincing them that Teesside has the right skills and supply chain for the expanding renewable energy industry.

At Seal Sands, the Biofuels Corporation is building Europe's largest biodiesel plant, and has recruited 70 workers.

The renewables sector employs about 6,800 people in the Tees Valley area, with turnover standing at £370m a year.

* INDUSTRIAL gases group BOC has signed a ten-year deal to supply a Biofuels' Seal Sands plant.

BOC will provide up to 26 tonnes of nitrogen a day from its Teesside base.