Petrobras Constructs Brazil’s First Alcohol Pipeline

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Researched by Industrial Info Resources (Sugar Land, Texas). Petrobras, Brazil’s state owned oil company, has announced the construction of the country’s first alcohol pipeline. The 715 mile long project is expected to begin operation in 2010. It will carry six million cubic meters of alcohol per year from the producing ethanol plants in Goiás, Minas Gerais and part of São Paulo, and it will link the Paulinia refinery (Replan) in São Paulo to the Senador Canedo terminal in Goiás.

The pipeline project is already viable based on the volumes of fuel produced by the region and the freight cost which will be reduced by 50%. The reduction in logistical costs will benefit the export markets and Brazilian combustible alcohol will become more competitive. Petrobras will be focusing on markets such as the USA, China, Korea, and South Africa. Japan is also a market of interest because it is expected to consume 1.8 million cubic meters of ethanol by 2010, with good prospect of growing to 10 million cubic meters, almost half of Brazil's present production. Petrobras is already studying the construction of a second alcohol pipeline, which will have the same extension and will connect Campo Grande, in Mato Grosso do Sul, to Paranagua’s Port in Parana State. Both pipelines would demand a $2 billion investment.

Large profits from ethanol production have led to lower sugar production costs, raising the product’s competitiveness and Brazil’s prospects as an exporter. The pipeline will facilitate ethanol shipments and attract new investments to the region making a very positive contribution to Brazil’s trade balance especially because alcohol production represents reduced petroleum imports

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