Cosan to invest $ 1 bn in ethanol pipeline

Brazilian ethanol and sugar producer Cosan plans to invest 1.64 bn reais ($ 1 bn) in the construction of a 618 km ethanol pipeline in Sao Paulo state.
Cosan is developing the Uniduto Logistica project in partnership with sugar and ethanol producers Copersucar and Crystalsev. The pipeline is scheduled to start operations by the first half of 2011.

The ethanol pipeline will link Santos port to the city of Paulinia, with offshoots to the municipalities of Ribeirao Preto and Conchas.
"We expect to reduce our logistics cost by 35-40 %," Cosan CFO Paulo Diniz told about the project. "Brazil currently exports 3.5 bpy of ethanol. With the pipeline, we'll have capacity exceeding 14 bpy."

Cosan expects federal energy company Petrobras to use the ethanol pipeline and extend it to other regions in the country.
"Petrobras might extend the pipeline from Ribeirao Preto to the south of Minas Gerais and Goias states. Or run the Conchas end to the state of Mato Grosso do Sul," Diniz said.

Petrobras's strategy is to lead biodiesel production and ethanol transport and logistics in Brazil.
Although the country is a major ethanol producer, its export capacity is limited as production centres in the country's inland are cut off from port infrastructure.