Bioethanol maker fails to obtain supply contracts
01/22/2009 | 03:35 AM
MANILA, Philippines - Ethanol supplier San Carlos Bioenergy, Inc. has set aside a plan to hike ethanol production and will instead build a 15-megawatt biomass project after failing to secure contracts from oil companies.
Shiva S. Mehrabi, marketing officer of parent Bronzeoak Philippines, Inc., Wednesday said that they have had a hard time in securing long-term contracts with oil companies for ethanol supply.
"With the current prices of gasoline, development of ethanol plants may have to be temporarily parked... Banks, on the other hand, will not provide financial services in the absence of these supply [purchase] agreements," Ms. Mehrabi told BusinessWorld.
The company owns San Carlos Bioenergy, Inc., which is set to supply 38 million liters of ethanol to Petron Corp. next month.
The country’s biggest oil refiner plans to sell gasoline with 10% ethanol blend (E-10) at all their Metro Manila stations starting next month pursuant to the law mandating cleaner fuel.
Ms. Mehrabi said Bronzeoak would likely put up a 15-megawatt biomass plant beside its existing eight-megawatt biomass plant in Negros Occidental. The plant will use agricultural waste to produce electricity.
"We are still looking for [buyers] of power, but we are confident that we’ll be able to have a demand with the Renewable Energy Law already in place," she added.
Ms. Mehrabi said the proposal, which they started studying last year, was being finalized.
"Hopefully it will be constructed by February and will be finished within the year," she said, adding that the project would be done with a foreign partner.
The Renewable Energy Act signed last month seeks to promote the development and commercialization of renewable energy resources by providing incentives to companies that invest in the sector.
Renewable energy sources include the sun, wind, bodies of water, organic matter and the earth’s heat.
According to the government, about $25 billion worth of renewable energy investments mostly from wind, hydro, solar and biomass amounting to 500 to 1,000 megawatts are expected over the next two years. The amount may rise to $80 billion in the next 10 years.
Despite postponing the ethanol expansion project, Bronzeoak will be operating a storage facility in Subic that will provide up to 184 million liters for oil companies that will be importing ethanol.
Bronzeoak Philippines is a joint venture between the Bronzeoak group and Zabaleta & Co. It is recognized as the leading bioenergy developer in the Philippines.
The Biofuel Law of 2006 mandates oil firms to add another 1% blend of coco-methyl esther --obtained from coconut — for diesel to raise the mix by 2%.
It also mandates a 5% blend of ethanol — a by-product of sugar — for gasoline, which must make up half of an oil firm’s total sales. Several oil companies, however, sell gasoline with as much as 10% ethanol blend.
Aside from Petron, Seaoil Philippines Inc., Chevron Philippines, Inc., Pilipinas Shell Petroleum Corp. and Flying V also sell E-10 fuel. Other companies are set to comply with the law next month. — Ava Kashima K. Austria, BusinessWorld
Shiva S. Mehrabi, marketing officer of parent Bronzeoak Philippines, Inc., Wednesday said that they have had a hard time in securing long-term contracts with oil companies for ethanol supply.
"With the current prices of gasoline, development of ethanol plants may have to be temporarily parked... Banks, on the other hand, will not provide financial services in the absence of these supply [purchase] agreements," Ms. Mehrabi told BusinessWorld.
The company owns San Carlos Bioenergy, Inc., which is set to supply 38 million liters of ethanol to Petron Corp. next month.
The country’s biggest oil refiner plans to sell gasoline with 10% ethanol blend (E-10) at all their Metro Manila stations starting next month pursuant to the law mandating cleaner fuel.
Ms. Mehrabi said Bronzeoak would likely put up a 15-megawatt biomass plant beside its existing eight-megawatt biomass plant in Negros Occidental. The plant will use agricultural waste to produce electricity.
"We are still looking for [buyers] of power, but we are confident that we’ll be able to have a demand with the Renewable Energy Law already in place," she added.
Ms. Mehrabi said the proposal, which they started studying last year, was being finalized.
"Hopefully it will be constructed by February and will be finished within the year," she said, adding that the project would be done with a foreign partner.
The Renewable Energy Act signed last month seeks to promote the development and commercialization of renewable energy resources by providing incentives to companies that invest in the sector.
Renewable energy sources include the sun, wind, bodies of water, organic matter and the earth’s heat.
According to the government, about $25 billion worth of renewable energy investments mostly from wind, hydro, solar and biomass amounting to 500 to 1,000 megawatts are expected over the next two years. The amount may rise to $80 billion in the next 10 years.
Despite postponing the ethanol expansion project, Bronzeoak will be operating a storage facility in Subic that will provide up to 184 million liters for oil companies that will be importing ethanol.
Bronzeoak Philippines is a joint venture between the Bronzeoak group and Zabaleta & Co. It is recognized as the leading bioenergy developer in the Philippines.
The Biofuel Law of 2006 mandates oil firms to add another 1% blend of coco-methyl esther --obtained from coconut — for diesel to raise the mix by 2%.
It also mandates a 5% blend of ethanol — a by-product of sugar — for gasoline, which must make up half of an oil firm’s total sales. Several oil companies, however, sell gasoline with as much as 10% ethanol blend.
Aside from Petron, Seaoil Philippines Inc., Chevron Philippines, Inc., Pilipinas Shell Petroleum Corp. and Flying V also sell E-10 fuel. Other companies are set to comply with the law next month. — Ava Kashima K. Austria, BusinessWorld
