Uchenna Izundu
International Editor
LONDON, Aug. 17 -- Brazil's state-run Petroleo Brasileiro SA (Petrobras) plans to spend $1.5 billion on biofuels in 2008-12 with a focus on ethanol distribution and biodiesel production, Petrobras Chief Executive Jose Sergio Gabrielli de Azevedo said Aug. 17 in London.
Petrobras will dedicate 46% of this total to pipelines, 29% to biodiesel, 4% to H-Bio, and 21% to other biofuels. Gabrielli told OGJ that Petrobras has formed a joint venture with Japanese firm Nippon Alcohol Hanbai for ethanol imports from Brazil. The JV is developing business models and Petrobras has signed memorandums of understanding with Japan to develop green field plants.
Earlier this year Petrobras also partnered with Mitsui to launch a feasibility study to increase ethanol and correlated product production and exports from Brazil to the international market. Currently Petrobras sells ethanol to Nigeria and Venezuela.
Gabrielli told OGJ that Petrobras also wants to build an ethanol pipeline from the midwestern and southeastern producing areas in Brazil to the port in Sao Paulo for exports. "Petrobras is also preparing to build ships in ethanol transport," he added.
Gabrielli said that although $1.5 billion on biofuels from the company's $112.4 billion investment over the next 7 years looked small overall, it was a relatively large sum compared with its peers. Petrobras is aspiring to export 4.7 million cu m/year of ethanol by 2012 to international markets, representing a 45.5%/year increase from 2008. "The ethanol production market is very mature," he said. "We are building three biodiesel plants now and we will probably do more."
According to Petrobras's 2008-12 strategic plan, it hopes to increase biofuel capacity from 329,000 cu m/year in 2008 to 938,000 cu m/year in 2012, and 1.2 million cu m/year in 2015. Domestic demand in Brazil is expected to rise from 329,000 cu m/year in 2008 to 1.3 million cu m/year in 2012, and 2.7 million cu m/year in 2015.
The risk, however, is with technological breakthroughs for biofuels production, including technologies based on low value-added raw materials such as residual biomass. Petrobras is working on new technologies to position it as a leader in the field, Gabrielli said.
Contact Uchenna Izundu at [email protected].
