Brazil: Petrobras and Galp close biodiesel production deal

14 October 2008

Sao Paulo, Brazil, 14 Oct – Petrobras and Galp Energia Friday in Lisbon signed an agreement for creation of a joint venture to develop a biodiesel production and sale project, according to Brazilian newspaper Gazeta Mercantil.

The joint venture, called “Projecto Belém” forecasts production of 600,000 tonnes of vegetable oil per year in Brazil, for production of 500,000 tonnes of second generation biodiesel per year, the paper said.

A statement from Petrobras said that half that volume would be produced in Portugal and the other half in a location that had yet to be decided, for sale in Europe, mainly Iberian markets.

The investment agreement signed in the Portuguese capital establishes the standards for the relationship between the parties for carrying out the project.

“If the feasibility fo the project is ocnfirmed, a company will be set up, with capital split between Petrobras (50 percent) and Galp Energia (50 percent), or their subsidiaries,” the statement said.

The agreement is the result of a Memorandum of Understanding signed on 18 May of last year, by the two companies to study the feasibility of joint implementation of projects for production, sale and distribution of biodiesel in the Brazilian, Portuguese and international markets. (macauhub)