MARLBOROUGH, Mass., May 18 /PRNewswire-USNewswire/ -- Qteros, the Massachusetts company whose breakthrough Q Microbe(TM) technology turns biomass into ethanol, announced that Valero Energy Corp. of San Antonio, one of the nation's largest energy companies, has become a significant investor.

Valero has established its investment in Qteros through its acquisition of certain assets of Verasun Energy.

Qteros, originally known as SunEthanol, has developed a proprietary, game-changing technology known as "C3" (Complete Cellulosic Conversion), using the naturally occurring Q Microbe(TM). First discovered in Western Massachusetts by Qteros Founder and Chief Scientist Dr. Susan Leschine, the Q Microbe(TM) has the unique ability to transform virtually any cellulosic material into ethanol in a single step, avoiding the usual two-step process in which expensive enzymes are used to break down the biomass before it can be fermented.

Qteros recently announced that it has received $2 million in U.S. government appropriations towards a pilot plant it plans to open this summer. The company has also received funding from Venrock, Battery Ventures, BP, and Soros Fund Management.

"Investment from established energy companies like Valero enables us to continue developing and scaling-up our technology," said Bill Frey, Qteros' CEO and formerly head of Dupont's biofuels division. "Qteros is moving ahead with our plans to open a pilot plant this year, as we continue preparations to expand to commercial scale production."

Valero Energy Corporation is a Fortune 500 company based in San Antonio with 22,000 employees and 2008 revenues of $119 billion. The company owns and operates 16 refineries throughout the United States, Canada and the Caribbean with a combined throughput capacity of approximately 3 million barrels per day, making it the largest refiner in North America. Valero also owns and operates six ethanol plants in the Midwest with a combined capacity of 670 million gallons per year, and is one of the nation's largest retail operators with approximately 5,800 retail and branded wholesale outlets in North America under various names including Valero, Diamond Shamrock, Shamrock, Ultramar, and Beacon.

Qteros recently announced plans to locate its pilot plant in Springfield, Mass. Over the past year and a half, the company has received four grants from the U.S. Department of Energy for technological development. The Qteros lab team has already achieved a 15-fold productivity increase in its cellulosic ethanol technology.