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Brazil Gets Ethanol/Gasoline/Diesel Pipeline

Oil pipeline in São Sebastião on the São Paulo coast, Brazil

Oil pipeline in São Sebastião on the São Paulo coast, Brazil The Brazilian southern state of Paraná will have a multi-pipeline, which will transport alcohol fuel from the midwestern states of Mato Grosso and Mato Grosso do Sul, and the northern region of the state of Paraná to the Port of Paranaguá.

With a capacity for 18 million liters (4.8 million gallons) per year, the work, which will have an investment of approximately 2 billion reais (US$ 940.7 million), is part of the Growth Acceleration Program (PAC) of the Brazilian federal government, and was confirmed last Thursday, March 1st, Brazil's Ministry of Planning, Paulo Bernardo, in Curitiba, the capital of Paraná state.

Bernardo visited Curitiba, along with Finance Minister Guido Mantega to participate in the Southern Regional Forum of the Council for Economic and Social Development. During the forum, the PAC was officially presented to businessmen and political leaders in the region.

In addition to industry executives and politicians from Paraná, also attending the meeting were businessmen and representatives of the Federations of Industries of the states of Rio Grande do Sul and Santa Catarina.

Construction work should begin in 2008. By the end of 2006, technical and engineering studies should be concluded. Afterwards, a tender will be issued for hiring contractors.

The multi-pipeline, which will also be capable of transporting gasoline and diesel, is going to cross the city of Araucária, in the Greater Curitiba region, where the Presidente Getúlio Vargas Refinery (Repar) is based. The plant has a processing capacity of 189,000 oil barrels per day.

The work had been a dream of businessmen and politicians in Paraná for 10 years. The initial idea was to build a gas pipeline to bring in gas from Bolivia, passing through Mato Grosso, Mato Grosso do Sul, and crossing the northeast and north of the state before getting to the Port of Paranaguá.

The transformation of the gas pipeline into a multi-pipeline will also allow for the transportation of alcohol fuel, of which Paraná is one of the country's largest producers. In the 2005/2006 crop, the state produced 1 million cubic meters of alcohol, of which 35% consisted of anhydrous alcohol (used as an additive to gasoline) and 65% of hydrated alcohol (vehicle fuel).

The multi-pipeline is part of a set of works for the southern Brazilian region, which, according to federal government plans, will receive investments of up to 37.5 billion reais (US$ 17.6 billion) by 2010. The funds will be invested, in infrastructure works, such as roads, ports and airports, in partnership with the private sector.

Omar Nasser works for Fiep (Federation of Industries of the State of Paraná)

Anba

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  • Show Comments (5)

  • Rafael

    Ethanol and biodiesel agent
    Dear sirs

    I would like to , introduce myself , Im graduated in Industrial Design and MBA in foreign business and experience with food industry , i made several contacts and network with many qualify industries in Brasil , if some CEO is interested in export business let me know , i would assist with our best efforts , skill and competence , and due diligence of course , conclude smoothly sucessfull business deal with ICC internationa chamber of commerce procedures.

  • Anon

    I hate to burst your bubble, but hardly any of the tariff actually gets paid. There’s this loophole in the US trade laws that allow “drawbacks”, where exports of jet fuel can offset the inflow of imported ethanol. It was no big deal for Brazil to import a measly 670 million gallons (that was the amount of US imports from Brazil in 06 ) of jet fuel and get out of the tariff. They also send another 20% or so via carribean nations and don’t pay any tariff.

    Talking heads and the nationalists in Brazil love to bitch about the U.S. tariff, but it’s really irrelevant. If the U.S. needs the supply, Brazil sells it. The U.S. bought 50% of all of Brazil’s ethanol exports in 06. Hardly the big mean neighbor to the north. Brazil’s ethanol transport infrastructure are internal problems that aren’t brought about by the U.S. tariff. I agree the Parana pipeline is peanuts compared to the volumes we’re talking about here.

  • conceicao

    A February 1 article in the Wall Street Journal stated that U.S. imports of Brasilian ethanol rose from 31 million gallons in 2005 to 418.5 million gallons in the first eleven months of
    2006. Two points. First, while a vital project for development in Parana, the pipeline would transport only a small percentage of the amount of ethanol that the U.S. is importing
    from Brasil. Second, and more importantly, assuming 450 million gallons of imports to the U.S. for all of 2006, the tariff extracted by the U.S. on these shipments (about $243 million
    U.S.) applied annually would be enough to fully finance and pay off over time at prevailing U.S. interest rates three of the type of pipelines discussed in this article. Sorry to keep
    harping on the tariff, but numbers like these show that it is literally sucking the lifeblood out of a lot of sorely needed Brasilian energy infrastructure development which would also help
    U.S. consumers.

  • Anderson

    i believe the tarif should be taken off, then the US wouldnt have to realy so much on fuel from the middleeast
    brazil need lots of pipelines and needs to be free from truck transport of fuel since the roads suck and the cost is too much, the pipeline would be good for lowering the price of the fuel in the midwest of brazil

  • conceicao

    I do not believe a similar venture is feasible at this point in the U.S. due to a variety of factors including higher production costs, the distances involved, and the opposition by
    environmentalists to the construction of new oil refineries. So I guess the ethanol lobbyists are getting all revved up to come up with some phony rationale for sending the marginal
    gallon of ethanol from the U.S. Midwest by rail and/or tank truck to the Gulf Coast instead of bringing cheaper fuel by cheaper, more fuel-efficient transport from Paranagua. Or
    maybe sanity will prevail and we will get rid of the stupid tariff.

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