Monday, May 21, 2007 Oil firm, Chinese traders ink deal for growth of RP's ethanol industry
A LOCAL oil company, Eastern Petroleum Corp. (EPC), has forged with Chinese businessmen a US$350-million agreement for the development of ethanol industry in the Philippines.
EPC chairman Fernando Martinez said the agreement signed between them and the Guanxi Estate Group involves the construction of ethanol plant with a total land area of 10,000 hectares in the next five years.
Martinez said Guanxi and EPC are looking at the possible production of 400 million liters of ethanol in 2010 in preparation for the implementation of E-10 blend.
The Bio-fuels Act of 2007 mandates oil companies to have a five-percent blend of ethanol in their gasoline products two years after the signing of the law and four years upon the effectivity of the law, the blend will be increased to 10 percent.
Martinez said EPC and Guanxi will be forming a 50-50 joint venture corporation. He hoped that other oil companies would join once the company is established.
"We will start looking for potential areas to develop into ethanol-producing lands," he said.
Among the areas being considered where ethanol plant could be put up are Zambales, Region 1, Region 10, Central Luzon, Cagayan de Oro, Davao, Batangas and Mindoro with cassava as the most likely feedstock to
produce ethanol.
"We think that it would be more viable to produce ethanol from cassava instead of sugarcane," said Martinez.
Only San Carlos Bio-energy and Southern Bukidnon Bio-energy have so far presented concrete plans for the construction of ethanol manufacturing plants.
San Carlos already signed an agreement with Petron Corp. to supply its bio-ethanol requirements and with commercial operation to start next year.
At present, the bio-ethanol program is limited to importation of anhydrous bio-ethanol, denaturing for local sale of fuel bio-ethanol, blending fuel bio-ethanol to gasoline and retail sale of E-gasoline. (MSN/Sunnex)
