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Brazil Studies Construction of Its First Alcohol Pipeline

Brazilian Petroleum, S.A. – and the government of the state of Goiás (through its Department of Infrastructure) signed a protocol of intentions today to conduct joint technical-financial studies on infrastructure investments for the exportation of fuel alcohol.

One of the projects being contemplated is the construction of the country’s first alcohol pipeline, linking the Paulinia refinery (Replan) in São Paulo to the Senador Canedo terminal in Goiás, with capacity to transport 4 billion liters. The investment will amount to around US$ 225 million.

The president of the company, José Sérgio Gabrielli, and the governor of Goiás, Marconi Perillo, participated in the ceremony, which was held at Petrobras’ headquarters in Rio de Janeiro.

Last month, Brazil’s Minister of Agriculture, Livestock, and Supply, Roberto Rodrigues, said that he will examine the availability of funds for the installation of 73 new sugar mills between now and 2012, in order to raise the country’s alcohol production.

According to Rodrigues, it will be necessary to increase the area of sugar cane cultivation by around 2.5 million hectares to meet the demand for sugar and ethanol.

The Minister believes that fuel consumption will grow in Brazil, due to the demand for flex cars, which can burn both gasoline and alcohol fuel, and the reduction in world sugar supplies.

"If this increase in demand for flex cars does in fact occur, eight years from now we will need another 12 billion liters of ethanol," he said, adding that ethanol is a strategic product for Brazil.

The minister ruled out the need for Brazil to import alcohol in consequence of the rise in prices since the beginning of the year. He said that the government expects the lower sugar mill prices provided for in the agreement signed with producers early in the month to be passed along to consumers.

ABr

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