Gulf Ethanol Announces LOI to Purchase Production Facility

Gulf Ethanol Corp. (OTC:GFET), a Houston-based biofuels company, announced today that they have entered into a Letter of Intent to purchase a portion of the GALCO plant located in the Bayport Industrial District of Houston, TX. Initial evaluations indicate that the facility can be modified to produce ethanol or bio-diesel fuel in volumes up to 30 million gallons per year.

Our plan to expand into ethanol production has the potential to generate significant profits and increased shareholder values, commented JT Cloud, CEO of Gulf Ethanol. We plan to rapidly expand into both the production and blending of ethanol products from our base in Houston, he added.

The 20-acre GALCO facility includes two process reactors and 22 process/storage tanks and is located within 3 miles of the Bayport deepwater port. With access to numerous pipelines, rail systems, trucking terminals and wastewater treatment the plant is ideal for the expanded business plan of Gulf Ethanol, stated Mr. Cloud.

The market for biodiesel is entering a phase of unprecedented growth. Drivers include environmental concerns, energy security issues, significant tax subsidies and current and pending state and federal regulations. Gulf Ethanol intends to position itself in the forefront of this burgeoning industry.

The Bayport Industrial District is one of Americas largest industrial parks and the center of the nations largest concentration of petrochemical production. Covering more than 10,500 acres, Bayport employs more than 7,500 workers and contributes more than $1 billion per year to the regions economy. More than 60 of the worlds most prominent industrial firms have plants or other sites in Bayport, including BP Amoco Corporation (NYSE: BP), Lyondell Chemical Company (NYSE: LYO), Dupont (NYSE: DD) and Hoechst Celanese (NYSE: CE).

About Gulf Ethanol Corporation

Gulf Ethanol will produce, distribute, and blend biofuels. Headquartered in Houston, Gulf Ethanol began as an importer of ethanol based fuel for blending operations from South America and the Caribbean Islands. For more information please visit our homepage at:

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This news release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements that include the words "believes," "expects," "anticipate" or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to differ materially from those expressed or implied by such forward-looking statements. In addition, description of anyone's past success, either financial or strategic, is no guarantee of future success. This news release speaks as of the date first set forth above and the company assumes no responsibility to update the information included herein for events occurring after the date hereof.

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