published: Wednesday | September 19, 2007
John Myers Jr., Business Reporter
The ethanol plant operated by Pertrojam Ethanol Limited in partnership
with Brazil's Coimex.
Brazil's Petrobras is in talks with Petrojam on the possibility of using
the refinery's Kingston port as a hub for the distribution of ethanol to
other Caribbean and Central American countries.
Refinery boss Winston Watson said Petrojam was open to the partnership
with Petrobras, but noted that the discussions were still at the
Brazil's Ambassador Cezar Amaral told Wednesday Business that the
distribution hub was among the issues discussed by his country's
president, Luiz Inacio Lula da Silva during his state visit to Jamaica
The cooperation agreement between the two countries expires at the end
"They negotiated a new one that included cooperation for construction
and technology for the regasification of liquefied natural gas (LNG) and
also the proposal to PCJ to constitute here in Kingston for the
distribution of ethanol," said Amaral.
Petroleum Corporation of Jamaica (PCJ), the parent company to Petrojam,
has also struck a cautious tone on the deal, though it has signalled
that it considers it a 'good idea'.
"The idea was introduced to us by Petrobras and this is something that
we will now have to get some further (details on) to see what volumes we
are talking about, what land (space) will be required," said PCJ group
managing director Dr Ruth Potopsingh.
"We need some more details. It is a good project idea, and I believe
that it is something that we could look forward to in the future."
Wednesday Business understands that the idea was first mooted about
three years ago, but was only put forward formally during Lula's visit
Biofuel hub viable
Ambassador Amaral said the biofuel hub was potentially viable given
Jamaica's proximity to the United States; existing infrastructure in the
form of a modern port and facilities at the Petrojam refinery; as well
as the local thrust into ethanol production.
He said that the rising price of oil on the international market — which
climbed to a new high above US$81 per barrel on Tuesday — would make
ethanol a cheape energy source for countries in the region.
Ethanol prices on the world market are running just above US$1.60 per
"I think that the (market) potential is much bigger than the present. It
could be multiplied by 20 because the difference in price between
ethanol and oil is so immense," Amaral said.
"We consider Kingston a very strategic place, considering the broader
markets for the United States, Central America and the Caribbean."
Petrojam, which is government-owned, is also involved in ethanol
production and export.
It has an existing partnership with the Brazils' Coimex, through
Petrojam Ethanol Limited (PEL) to manufacture and sell ethanol to the
United States under the Caribbean Basin Economic Recovery Act which
allows Jamaica to export the biofuel duty free.
PEL produces 20 million gallons of ethanol per year on average — half
the plant's capacity — from feedstock supplied by Coimex.
Brazil is the world's largest producer of ethanol, outputting some 21
billion litres of fuel grade ethanol annually, which it hopes to double
to 44 billion litres by 2016.
Jamaica is also building up its sector, with the newest entrant being JB
Ethanol Limited, a subsidiary of poultry producers Jamaica Broilers
Group, whose 60-million plant at Port Esquivel was commissioned in July.
JB Ethanol, PEL and another player, Jamaica Ethanol Processing Limited
have a combined capacity of over 150 million gallons annually.
PEL has generated US$92.5 million ($6.29 billion) in sales from export
of 45.2 million gallons of ethanol since the processing facility was
established in 2004. The venture, according to its owners, has proven to
be profitable and there are plans to add another 60-million-gallon plant
to boost production capacity to about 100 million gallons annually.
Newcomer, JB Ethanol - which was officially opened by Brazil's President
Lula on August 9 - has already exported its first shipment to the US.
Another company, Global Energy Ventures Limited, has been granted a
permit to construct a new 60 million gallon plant at Port Esquivel.
Petrobras is among the top 20 largest oil companies in the world, and is
recognised for having some of the most advanced technologies in deep
water oil exploration and extraction.
According to 2002 figures, the Brazilian owned company generated
revenues in excess of US$22 billion annually, with daily crude oil
production reaching 1.53 million barrels and 44 million cubic metres of
Jamaica's participation in the sector is fairly recent, dating back to 2004.
With the new hub, Ambassador Amaral said the Kingston harbour would have
to be dredged to accommodate the huge tankers that are expected to sail
in and out of the port.
The deal would require Petrojam to upgrade its facilities, said Amaral.
Check for earlier Pacific Biofuel posts: http://pacbiofuel.blogspot.com/