Brazilian firm plans $1 billion ethanol pipeline

Eric Watkins
Senior Correspondent

LOS ANGELES, Apr. 29 -- Brazil Renewable Energy Co. (Brenco) plans to invest $1 billion to build a 1,100-km, 4 million l./year ethanol pipeline extending from Alto Taquari in Mato Grosso state to Santos—the country's largest port—in Sao Paulo state on the country's south Atlantic seaboard.

Brenco has applied to Brazil's environmental protection agency Ibama and the national petroleum agency ANP for the necessary licenses to construct the pipeline. Brenco said its line would not compete with other ethanol pipelines planned by state-owned Petroleo Brasileiro SA (Petrobras).

In addition to the Port of Santos, the pipeline will serve five other proposed terminals at Alto Taquari in Mato Grosso; Costa Rica in Mato Grosso do Sul; Paranaiba in Goias state; and Sao Jose do Rio Preto and Paulinia, both in the state of Sao Paulo.

The announcement was made as construction began on Brenco's 450-million-real sugar and ethanol mill in Alto Taquari. The facility will process 3 million tonnes of sugar cane and produce 275 million l. of ethanol by 2009.

The Alto Taquari mill will be the first of 10 units Brenco plans to build in Brazil by 2009 having a combined capacity of 3.7 billion l./year of ethanol. All of the output will be carried by the proposed ethanol pipeline, which may also ship ethanol produced by other operators in the region.

In 2007, Brazil exported just over 3 billion l. of ethanol, according to the Brazilian Development Ministry Foreign Trade Department. The Port of Santos handled some 60% of the exports, followed by the Port of Paranagua with around 23%.

The country's ethanol exports are expected to reach 3.91 billion l. in 2008-09, up 27% from the 3.1 billion l. exported in 2006-07, according to the Union of Sugarcane Industries.

Brazil's total ethanol production in 2007 was reported to be 20-22 billion l. Production is expected to exceed 100 billion l./year by 2025, according to ICIS Chemical Business.

Contact Eric Watkins at hippalus@yahoo.com.

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