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Petrobras secures second ethanol pipeline

27th March, 2008

Brazil's state-owned oil company Petrobras has announced it will sign a cooperation agreement with two Brazilian states for the country's second ethanol-only pipeline.

Petrobras and the states of Mato Grosso do Sul and Parana plan to develop viability studies for the pipeline, which would link Campo Grande in western Brazil to the port of Paranagua in southern Brazil.

Earlier in March, Petrobras and Japan's corporate conglomerate Mitsui Group announced the formation of Participacoes Nippo Brasileira em Complexos Bioenergeticos SA, a joint venture that will provide ethanol for export to Japan.

In March 2007, Petrobras began constructing an ethanol export pipeline from its central-west to the southeast coast. Petrobras invested $30 million (€19 million) in the first phase, which included the installation of pumps to the pipeline that is used by Petrobras to transport petrol and diesel between Paulinia, in Sao Paulo, and Ilha D'Agua in Rio de Janeiro. The work on the first phase is due to finish in 2008, when it is expected to move 4 million m³ of ethanol a year.

Work on the second phase of the first ethanol pipeline project should finish by the end of 2009. It will require investments of $180 million and will include the construction of a new pipeline section from Paulinia to Guararema, both in Sao Paulo, solely for ethanol use.

'Our objective is to have a system totally designated for ethanol,' Marcelino Guedes, director of pipelines and port terminals at Petrobras, says. 'Nobody has this, not even the United States.'