São Paulo – Ethanol exported from Brazil should become approximately 25% cheaper once pipelines start being used in its transport. One of the largest alcohol pipeline projects in Brazil is scheduled to begin operation in 2012, run by logistics company Uniduto Logística, which was established last year by ten large sugar and alcohol industry groups.
According to the chairman of the company, Sergio Klaveren, the 570-kilometre-long pipeline is going to transport 17 billion litres of ethanol per year, within the state of São Paulo, to a private port in the city of Guarujá, on the coast of the state, from where it will be exported. The port is also a project of Uniduto’s.
According to Klaveren, the combination of these two factors, i.e. the use of the pipeline and of the private port, is going to enable ethanol to be exported at cheaper prices. Out of the total that will pass through the duct, 70% will go to the foreign market. Presently, ethanol is transported across the Brazilian territory through highways, by lorries, and railways.
To the chairman of Uniduto, the cost reduction will take place despite the US$ 1 billion investment that the project will demand. If it were not for the amortization of that figure – that is, had the pipeline been in use for a few years already -, then the rate of reduction in ethanol transportation costs would be even higher, says Klaveren.
Ethanol exports are gaining importance in Brazil every year. In 2004, the country exported 2.4 billion litres, according to figures supplied by the São Paulo Sugarcane Agroindustry Union (Unica). Last year, exports totalled 5.1 billion litres, and from January to August this year, sales amounted to 2.2 billion litres.
In January, one tonne of ethanol exported from Brazil sold for US$ 475.54, whereas last month the price was US$ 392.17. The leading foreign destination of Brazilian ethanol is the United States. Last year, the country accounted for the purchase of 1.5 billion litres, out of the total of 5.1 billion shipped.
The groups in charge of implementing the alcohol pipeline project are the leading Brazilian ethanol exporters. They represent 88 different plants in the states of São Paulo, Minas Gerais and Goiás. According to Klaveren, 60% of the alcohol pipeline will be used by the partners of Uniduto, which account for one third of the Brazilian ethanol output. The remaining 40% will be used by other plants.
The use of pipelines is the prevailing trend, according to the company chairman, for ethanol transportation. Apart from cost reduction, pipelines favour the reduction of emissions that highway transport generates.
Uniduto’s partners include large sugar and alcohol industry companies such as Allicom, Copersucar, Cosan and Crystalsev. The pipeline will have collection and distribution centres in the interior of the state of São Paulo. Further on, the idea is to have centres in the other states as well.
The ground plan for the pipeline should be ready by the end of the year. According to Klaveren, the technology that will be adopted is not new. It is the same one that is used in other pipelines for liquid transportation in Brazil and worldwide.
*Translated by Gabriel Pomerancblum
