20-06-07 Brazilian energy giant Petrobras plans to begin producing and marketing its own ethanol from sugar cane for the export market in 2009, aiming for sales of some 1 bn litres (264 mm gallons) per year, a high-level executive said.
The Petrobras executive in charge of fuel supplies, Paulo Roberto Costa, told that the company's ethanol pilot project called for building five plants with the capacity to each produce 200 mm litres (52.8 mm gallons) annually of the clean-burning fuel.

Ethanol, made from crops such as sugar cane and corn, is basically grain alcohol. The clean-burning fuel is usually mixed with unleaded gasoline and can be pumped into vehicles at existing service stations.
Petrobras expects to sign contracts this year with customers for the fuel produced by the plants, whose construction is being financed by state development bank BNDES and Japan's JBICA export-promotion bank, the executive said.

Each distilling plant will cost between $ 200 mm and $ 250 mm, Costa said. The executive said Petrobras's strategy was to sign 15-year supply contracts to make obtaining financing easier.
The company's most ambitious project calls for building 40 ethanol plants in Sao Paulo, Minas Gerais, Goias, Mato Grosso, Mato Grosso do Sul, Piaui, Maranhao, Bahia and Pernambuco.

In recent months, Brazilian President Luiz Inacio Lula da Silva has signed agreements with the United States, Italy and Panama to promote the production and use of ethanol. Brazil, one of the world's largest producers of the alternative fuel and the No. 1 exporter of ethanol made from sugar cane, plans to double production of the biofuel over the next five years.
Currently, the South American nation produces some 17 bn litres (4.5 bn gallons) of ethanol per year and exports about one-quarter of it to help meet the growing demand for the alternative fuel in Asia, Europe and North America. Last year, Brazil exported 3.9 bn litres (1.03 bn gallons) of ethanol, capturing 70 % of the global foreign sales of the fuel. The 2006 sales volume was a 50 % increase over the 2.6 bn litres (686 mm gallons) Brazil sold internationally in 2005.

Petrobras, for its part, exported 120 mm litres (31.7 mm gallons) of ethanol last year, with most of the fuel going to Venezuela. Earlier this month, Petrobras sent its first shipment of ethanol to Japan, a market that holds great potential for the biofuel. The Japanese market has the potential for ethanol use of 300 mm litres (79.25 mm gallons) per year, Petrobras said.
The fuel was shipped by Petrobras and Brazil-Japan Ethanol, a joint venture created last year by the Brazilian energy firm and Nippon Alcohol Hanbai to distribute ethanol produced from sugar cane in Brazil to Japanese customers.

Petrobras wants to expand exports of ethanol to 850 mm litres (224.55 mm gallons) this year and 3.5 bn litres (924.65 mm gallons) by 2011, increasing sales to Japan, the United States, Venezuela, Nigeria, China, South Africa and some European Union member states. Petrobras plans to invest $ 1.6 bn over the next five years to expand its production capacity to meet foreign demand for ethanol.
Petrobras, whose shares are listed on the Sao Paulo, Buenos Aires, Madrid and New York stock exchanges, has some 52,000 employees and posted revenues of $ 74 bn last year, making it one of the largest oil companies in the world.