Nigeria Adds Ethanol to Its Gas and Brazil Is Supplying the Additive

Brazil's Petrobras offshore platform

Brazil's Petrobras offshore platform Brazilian state-owned oil company Petrobras will sell, in the following days, an initial shipment of 20 million liters of ethanol to Nigeria, in Africa. Other shipments will take place according to the needs of the program for implementing ethanol into the Nigerian energy matrix.

According to Petrobras, negotiations for ethanol sales to state-owned Nigerian National Petroleum Corporation (NNPC) started in August 2005. Nigeria is implementing a program for adding 10% of alcohol to the gasoline sold in the country.

Petrobras will also provide technical support to Nigeria for mixing and handling alcohol, in addition to training employees of NNPC.

Nevertheless, the Brazilian state-owned oil company does not forecast any investment in the construction of ethanol production plants, or even premises for storage, handling, and mixing ethanol with gasoline in the Nigeria.

The Brazilian oil giant announced May 14 that it had for the first time exported ethanol to the US at the same time it is still discussing subsidies paid by the American government to ethanol producers in the United Sates. The volume exported by Petrobras was 12 million liters. Individual firms had already exported the produce to the US.

Earlier this month, Petrobras and Algerian state-owned oil and gas company Sonatrach signed an agreement containing guidelines for the sale of liquefied natural gas (LNG) by Algeria.

It means that Petrobras will be able to import gas from Algeria starting next year. According to information disclosed by a spokesperson for Petrobras, the company intends to sign the same kind of agreement, a Master Agreement, with several companies in the LNG trade chain.

The objective is to have agreements ready for the possible import of gas starting in the second quarter of 2008, which will depend, according to Petrobras, on the needs of the Brazilian market.

Petrobras has already signed a similar contract with Nigeria LNG, and should do the same with other companies, according to the organization. The start of operation of the first Petrobras regasification unit is scheduled for the second quarter of next year, making it possible to import gas from more distant places.

The Brazilian government announced, early this year, due to problems in the supply of Bolivian gas, which the country was going to seek other suppliers of the product, among them Algeria and Libya.

Due to the distance between these countries and Brazil, however, LNG must be transported in the liquid form for later transformation into gas, a process executed at regasification terminals.

The country is building two terminals of the kind. The second should be delivered in the first quarter of 2009, according to a Petrobras spokesperson, but delivery may be advanced to the end of next year.

One of the terminals will be in Pecém port, in the northeastern state of Ceará, and the second in Guanabara Bay, in Rio de Janeiro. Both terminals forecast a maximum demand of 20 million cubic meters of gas a day.

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