Rio de Janeiro - Brazil's state energy company Petrobras is
contemplating increases in its investment plans for the production
of ethanol, in the face of a possible deal between Brazil and the
United States to boost use of this biofuel in other countries.
'If talks with the United States evolve, we will have to expand
the project,' said Petrobras' director of supplies Paulo Roberto
Costa, in comments that the Brazilian daily O Estado de Sao Paulo
published Monday.
Cooperation in the field of biofuels is set to be the main topic
of discussions between Brazilian President Luiz Inacio Lula da Silva
and his United States counterpart George W Bush, when they meet on
Friday in Sao Paulo in the framework of Bush's Latin American tour.
Lula said Monday that he intends to ask the US president to reduce
tariffs on imports of Brazilian ethanol, which is made from sugar
cane and is a more efficient source of energy than US ethanol
produced from corn.
Brazilian Foreign Minister Celso Amorim admitted that the demand
will probably not be satisfied in the short term. The US Congress
approved an increased tariff which is due to expire in 2009, but
Petrobras considers that there are perspectives for a future increase
in Brazilian ethanol exports to the US market.
Brazil exported 1.8 billion litres of ethanol to the United States
in 2006 - more than half its export total - despite an extra 14
cents per litre that US importers have to pay for Brazilian ethanol.
Petrobras accounted for 600 million litres of exported ethanol in
2006 and is expecting the figure to rise to 850 million this year.
The company's export capacity is 1 billion litres.
According to the Petrobras official, if the expectations of
increased sales of the biofuel to the US and other countries are
confirmed, the company will need to review its plans, which currently
contemplate investments of 2.4 billion dollars by 2012.
The funds are earmarked for the construction of a network for the
transport of ethanol produced in the south-eastern, centre-western
and southern regions of Brazil to the terminal in Paulinia, in the
state of Sao Paulo.
Besides, in association with the Japanese company Mitsui and with
financial support from the Japan Bank for International Cooperation
(JBIC), Petrobras plans to purchase a stake in up to 40 new plants
for the production of ethanol and to build terminals to hold stocks
of the biofuel in Japan.
The Asian country is considering the use of ethanol mixed with
petrol - a practice that is compulsory in Brazil - and to generate
energy in thermal power plants.
No contract has been signed yet, but Petrobras has estimated that
Japan could import between 1.8 billion and 6 billion litres of
ethanol a year.
Overall Petrobras' current investment plans are based on the
expectation that its foreign sales of ethanol will reach 3.5 billion
litres per year by 2011.
The state-owned company is only one player in Brazil's highly-
fragmented ethanol market. Indeed, Brazil exported 3.4 billion litres
of the biofuel in 2006, with only 225.4 million litres going to
Japan.
If however Petrobras' ethanol exports rise to more than double the
current expectations, to reach 8 billion litres per year in 2011, the
construction of a new pipeline linking the Paulinia terminal to the
port of Sao Sebastiao, in Sao Paulo, would be financially viable,
according to the estimates of Petrobras technicians.
Currently, ethanol is transported by truck to ports in either Sao
Paulo or Rio de Janeiro.
Costa said that the revised plans could also include the purchase
of tankers for ethanol transport.
© 2007 dpa - Deutsche Presse-Agentur 
USA
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