Petrobras Considering 1-Billion Gallon/Year Ethanol Pipeline
2 February 2006
Reuters. Petrobras, the Brazilian state-run oil giant, is considering the construction of a US$226 million (€186 million) ethanol pipeline capable of transporting 4 billion liters of ethanol per year.
The pipeline under consideration would run from the central state of Goias to a refinery in Paulinia, near Sao Paulo, through Brazil’s main producing centers of sugar cane and ethanol.
“We are the only country in the world that has the technology to build an ethanol pipeline,” [Petrobras Chief Executive Sergio] Gabrielli said. ”To make the ethanol market grow is strategic for the world, not only for Brazil.”
In his state of the union address Tuesday, U.S. President George W. Bush said he wants to substitute a large part of gasoline consumption with alternative fuels by 2025. Gabrielli said Brazilian ethanol was an option.
Although most of Brazil’s ethanol production is for domestic production, Petrobras is ramping up its ethanol exports, and has confirmed shipments totaling 250 million liters (65 million gallons) to Venezuela and Nigeria. The company is also in talks with China, South Korea, India and the United States.
However, after a recent trade mission to Brazil, US Senator John Thune (R-SD) concluded that Brazil may not be a threat to the US ethanol industry as he had thought. The much lower cost of production of Brazilian ethanol could make it attractive as an export to the US.
Thune said Brazilian government and trade officials told him that their interest in exporting ethanol to the United States has diminished.
They seem content to have a domestic market and to export to countries other than the United States, he said.
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