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Oil & Gas Journal

Eric Watkins
Senior Correspondent

LOS ANGELES, July 5 -- A 20-60-20 joint venture comprised of Petroleo Brasileiro SA (Petrobras), Itaruma Participacoes SA, and Mitsui & Co. has been established with the aim of exporting bioethanol from Brazil to markets in Japan, Europe, and North America.

At a cost estimated at ¥30 billion, the partners will construct a 200,000 kl./year bioethanol plant in Itaruma, Goias state, and cultivate some 30,000 hectares of sugar cane as feedstock in Cerrado—all exclusively for the production of bioethanol starting in second half 2009.

The project partners say the new venture—in "a wild inland grassland area"—will not compete with the country's sugar market or contribute to the deforestation of the Amazon rainforest.

The project also will use bagasse (pomace of sugar cane) by combusting it and collecting the resulting heat for ethanol production and generating electricity by a steam boiler. "Consequently," the partners said, "the bagasse power generation will help reduce the consumption of fossil fuels."

Last month, it was reported that Petrobras's gasoline-ethanol blend will be sold in Japan in 2008. Petrobras will supply E3—gasoline blended with 3% ethanol—to independent gas stations, with the wholesale price expected to be ¥1-2 less per liter than ordinary gasoline.

Earlier this week, Brazilian ethanol producer Copersucar, eyeing increased export potential and growing competition, signed an agreement to supply 200 million l./year of ethanol exports to Japan Biofuels Supply LLP (OGJ Online, July 3, 2008).

Contact Eric Watkins at hippalus@yahoo.com.