Petrobras and Grupo Sao Martinho to boost ethanol production

Petroleo Brasileiro's (Petrobras) Biocombustivel subsidiary is forming a joint venture with energy group Grupo Sao Martinho to boost ethanol production in the Brazilian state of Goias. The venture, called Nova Fronteira Bioenergia, will control the Boa Vista Mill and greenfield project, SMBJ Agroindustrial.

Petrobras is pumping BRL421m (USD236m) into the joint venture in return for a 49% equity stake. The funding will boost Boa Vista Mill's capacity from 2.5m tonnes of sugarcane to 7m tonnes by 2015. Petrobras will invest the initial BRL257.6m (USD144.1m) following the completion of due diligence, with the remaining amount to be paid within a year.

Last year, Petrobras committed to investing around USD2.8bn in biofuels. The investment is being channelled into ethanol and biodiesel production, as well as related infrastructure including ethanol pipelines. Last month, the firm teamed up with Portuguese energy firm Galp Energia to produce biodiesel for the European market.

source: cleantech.strategyeye