Petrobras and Galp Energia form biodiesel venture

Mon Oct 13 2008, 11:54 AM

Portugese oil company Galp Energia is forming a joint venture with Brazil’s state-owned oil firm Petroleo Brasileiro (Petrobras) that aims to produce 500,000 tons per year of biodiesel from vegetable oil. The firms will use 600,000 tons per year of vegetable oil produced in Brazil. Half of the biodiesel processing facilities will be in Portugal, with the remainder at an undisclosed location. The venture, provisionally dubbed the Belem project, is the result of feasibility studies the firms conducted since signing a memorandum of understanding last May.

In July, Petrobras and Japanese trading group Mitsui agreed to produce 13m gallons per year of ethanol from sugarcane. Petrobras is also building an ethanol pipeline in partnership with Mitsui and construction group Camargo Correa to connect biofuel produers in central Brazil with Petrobras’ Sao Paulo sea terminal. In addition, the firm is exploring cellulosic biofuels. In March, Petrobras signed a partnership deal with Khosla Ventures-backed startup KiOR to develop cellulosic ethanol from sugarcane waste.