Petrobras JV to start E3 gasoline pilot sales in Tokyo from March

Tokyo (Platts)--27Feb2009

Brazil-Japan Ethanol, a 50:50 joint venture between Brazil's state-owned oil company Petrobras and Japan Alcohol Trading, will start trial sales of 3% ethanol-blended gasoline in the greater Tokyo area from March 2, its maiden biofuel sales since being established in 2006.

The JV aims to start full-scale sales of E3 gasoline by around 2011-2012, after completing tests over the next couple of years, company president Jiro Amagai said in an interview with Platts this week.

The long-planned move comes after the company this week started up its first terminal in Sodegaura, Tokyo Bay, where it has gasoline and ethanol storage tanks and a blender. The terminal will allow it to supply finished product to the greater Tokyo area, Amagai said.

The terminal received its first supplies, comprising 100 kiloliters (629 barrels) of gasoline from Nansei Sekiyu's Nishihara refinery in Okinawa, southwestern Japan and 8 kl of domestically produced ethanol from Bio-Ethanol Japan Kansai Co., on February 21, Amagai said.

BJE's first E3 gasoline sales will be to a government-owned service station in Tokyo which is involved in a pilot project run by the Osaka Prefectural Government. The project is part of an Environment Ministry scheme that started in October 2007 and that will run until March 2012.

"We will start supplying E3 gasoline produced at our Sodegaura terminal to the Environment Ministry's service station in Shinjyuku Gyoen National Garden from March 2," Amagai said.

BJE will replace the Osaka Prefectural Government, which has been supplying E3 gasoline by truck from Chusei Oil Co.'s Okayama terminal in western Japan since November 2007.

BJE will supply the service station until the end the current fiscal year on March 31, but the ministry has not officially clarified whether BJE will continue as supplier beyond then.

Under the pilot project, the prefectural government currently supplies E3 gasoline to 17 independent service stations, 11 of which are in Osaka and six in other major cities, an official said.

The Osaka project produces E3 gasoline at Chusei Oil Co.'s Okayama terminal using cellulosic ethanol produced by Bio-Ethanol Japan Kansai. Since November 2008, Nansei Sekiyu, in which Petrobras holds a majority stake, has been supplying 1,000 kl/month of gasoline from the Nishihara refinery to the Okayama terminal, officials said.

SODEGAURA PROJECT

To move forward its experimental sales of E3 gasoline in the greater Tokyo area, Petrobras and Japan Alcohol Trading this week approved a decision to increase their capital in BJE by some Yen 200 million ($2.04 million), senior company officials told Platts.

BJE spent around Yen 1-1.5 billion on building the Sodegaura terminal, which is equipped with two 600 kl gasoline tanks, and two 30 kl ethanol tanks with a blender, Amagai said.

During the pilot stage one of the gasoline tanks will be used for receiving gasoline and the other will be used for storing finished E3 gasoline, the company officials said.

For the next fiscal year starting in April, BJE aims to supply E3 gasoline to more than five service stations in greater Tokyo, including in Chiba prefecture, where its Sodegaura terminal is located, Amagai said.

"We plan to supply independent service stations and stations owned by companies in such businesses as delivery services to begin with," Amagai said.
"Our primary purpose with these experimental sales is not to sell large amounts. We intend to examine areas such as quality maintenance at storage tanks and compile feedback from consumers to establish our business model."

"We will look at quality maintenance in storage tanks throughout hot summer and cold winter periods by producing more than we supply," Amagai said.
"We intend to start full-scale sales of E3 gasoline after two to three years," he added.

BJE plans to buy its gasoline from Nansei Sekiyu, in which Petrobras holds 87.5% and Japan's Sumitomo the remaining 12.5%, Amagai said. He added that ethanol requirements will be secured from various suppliers including Bio-Ethanol Japan Kansai, and in the future possibly imports from Brazil.

Meanwhile, BJE will also consider passing on to customers the benefit of reduced gasoline tax on ethanol-blended gasoline brought in by the government on February 25, Amagai said.

For E3 gasoline, local suppliers will get a Yen 1.6/l deduction from the Yen 53.80/l gasoline tax by filing application documents to the Ministry of Economy, Trade and Industry, a ministry official said.

DOUBLING ETHANOL SALES IN JAPAN IN 2009

Japan's consumption of 3% ethanol-blended gasoline to date has been low due to limited availability of ethanol. Most of the consumption is by government-funded pilot projects. Under current regulations, which date from 2003, refiners are allowed to blend up to 3% ethanol into gasoline.

Due to limited demand for direct blending ethanol gasoline, it was only last year that BJE began selling ethanol to industrial users in Japan. The company plans to sell 90,000 kl (566,082 barrels) of ethanol in 2009, mainly to Japan Alcohol Corp. for industrial use, up from 40,000 kl in 2008, Platts reported earlier.

BJE has also secured storage tanks in Ulsan, in the southeast of South Korea, where the JV unloads ethanol from medium-range vessels. The company can ship ethanol to its industrial customers in Japan on short-range vessels.
Last year, Petrobras signed its first ethanol plant deal with Japan's Mitsui and Brazilian ethanol producer Italuma to build a 200,000 kl/year ethanol plant in Italuma in Goias State, Brazil.

The partners will start production in late-2009, with an eye to bringing the plant to up to 200,000 kl/year during 2013, Platts reported previously.
Japan has agreed to reduce its greenhouse gas emissions by 6% from 1990
levels between 2008 and 2012 under the Kyoto Protocol. At an April 2005 cabinet meeting, Japan also committed to consuming 500,000 kl/year crude equivalent in biofuels from fiscal 2010-2011 (April-March) to help meet its Kyoto commitments.

日伯エタノール株式会社の概要

【英 文 名】 BRAZIL-JAPAN ETHANOL Co., Ltd.
【設　　立】 ２００６年３月３日
【事業内容】 ブラジルからのエタノールの輸入・販売（ペトロブラスの輸入総代理店）
　　　　 　　 CO2排出権取引
【資 本 金】 ８,０００万円
【株主構成】 日本アルコール販売�� 50％
ペトロブラス 50％
【役　　員】 代表取締役社長 雨貝　二郎
代表取締役副社長 クニユキ　テラベ
　　　　 　　 取締役 総務部長 掛林　誠
　　　　 　　 取締役 営業部長 ニュートン　タカヒロ　ソノキ
　　　　 　　 監査役 玉木　昭久
　　　　 　　 監査役 ジェラルド　ベルゲッテ
【所 在 地】 東京都中央区日本橋小舟町６番６号
【Ｔ　Ｅ　Ｌ】 ０３−３６６９−９５００


＜関係企業の概要＞
　■日本アルコール販売株式会社
　代 表 者 　雨貝　二郎
　設　　 立 　１９４７年
　資 本 金 　５２５百万円
　売 上 高 　約３６５億円
　主要事業は、アルコールの販売、混合溶剤・製剤の製造販売等。工業用アルコール市場のシェア約７０％を占める。

日本アルコール産業グループ（略式名称 アル販グループ）は、日本アルコール販売株式会社を中核とし、連結会社として、日本アルコール産業株式会社、信和アルコール産業株式会社、日本アルコール 物流株式会社の３社、関連会社としてアルコール海運倉庫株式会社、日伯エタノール株式会社を擁し、工業用アルコールの製造販売、アルコールを主原料とした 混合溶剤・製剤等の製造販売及びアルコール等の輸送を業務としております。
　　このアル販グループは、その製造部門が国営アルコール工場から出発し、特殊法人等を経て、現在の特別法に基づく政府出資会社に至るまで、高品質製品の 安定的な生産体制の維持・強化に努めてきたところであり、また、販売ネットワーク部門が専売アルコールを一手販売する許可を受けた普通売捌人から出発し て、効率的全国販売ネットワークを整備してきておりますが、専売制度下から今日に至るまでの６０年余、全国のお客様に工業用アルコールの低廉かつ安定的な 供給を行うという社会的使命を果たしてまいりました。
　　今日のアル販グループは、「永年培った経験と実績を活かし、さらに、お取引をいただく皆様との対話を大切にして、信頼と満足をいただける商品・サービスを提供する」ことを経営理念としております。
　　アル販グループは、アルコール業界における製販トップ企業、化学品メーカー・商社として業界で評価される地位、アルコール物流の最先端企業というお取 引先様の高い評価、燃料アルコール供給の中核を占める先駆的企業、地球環境の保全に配慮した経営を目指し、今後、積極的な事業展開を図って参ります。今後 とも一層のご支援、ご協力を賜わりますようお願い申し上げます。