Winston Watson (right), managing director of Petrojam, along with (from left) Karl James; Celso Amorim, Brazilian Minister of External Affairs; and Brazilian ambassador Cezar de Souza Lima Amaral, during a tour of the 40-million gallon ethanol plant during its construction in this May 16, 2005 Gleaner photo. - File
John Myers Jr., Business Reporter
Petrojam said yesterday the 60-million gallon ethanol plant announced last year will take US$18 million to US$20 million to build, but refinery manager Winston Watson said the search for a location continues.
Watson told Wednesday Business that, notwithstanding Petrojam's acquisition of two properties in December, the space at the Marcus Garvey Drive, Kingston terminal was not sufficient to site another ethanol plant.
Plans for construction
Petrojam acquired premises that once housed the Esso Refinery and property belonging to Antilles Chemical for US$7 million, but that space is to expand the oil refinery, from its 35,000 barrel capacity to 50,000 barrels per day.
Petrojam's subsidiary, Petrojam Ethanol Limited (PEL), already operates a 40 million gallon plant, built for US$10 million, but plans to start construction on the larger plant this fiscal year.
Watson said, however, that the timetable was still dependent on whether PEL could source adequate supplies of sugar cane locally as feedstock.
"We need to put in place some arrangement with the local sugar industry," he said.
But Karl James, who is both chairman of Petrojam Ethanol and general manager of the state company that markets Jamaica's sugar overseas, Jamaica Cane Product Sales, said PEL may have to continue using Brazilian feedstock to manufacture ethanol when the new plant comes on board, as the sugar cane industry at present is unable to supply the quantity required.
Dependent on cane supply
"The programme is to eventually start using feedstock from local sugar cane to do ethanol ... and I don't see it happening in 2008, but what we are hoping is that by the time we get to 2009, we will begin to see the signs of that," James said.
"Right now, we have this target for the sugar industry to produce as much ethanol as it can, but it depends on how fast we can increase the cane supply," James added.
Jamaica milled 1.74 million tonnes of cane last year, but this figure represented a fall back to 2003 performance when factories crushed 1.77 million tonnes. Peak production reached 1.99 million tonnes in 2004.
PEL, on which Petrojam has joint ventured with Coimex of Brazil, produces anhydrous ethanol from wet ethanol from Brazil primarily for export market into the United States (U.S.) under a duty-free regime created by the Caribbean Basin Initiative (CBI).
But with Government's plan to replace 10 per cent of the MTBE in gasolene with ethanol by 2008, and a growing market in the U.S., Petrojam is looking to increase production of the biofuel to 100 million gallons annually.
It had also considered doubling the current plant located at the refinery grounds at Marcus Garvey Drive, but the constraints on space appears to have shelved those plans in favour of a second larger plant.
Waiting on ratification
Last week, American President George W. Bush told CARICOM leaders who met with him in Washington that he would seek an extension of the CBI to 2011. If the Democratic-led Congress ratifies the decision, Jamaica will continue to have duty-free access for ethanol - the pull for Brazilian energy companies in the partnerships they are negotiating with different interests here.
Petrojam Ethanol has generated US$92.5 million ($6.29 billion) in sales from export of 45.2 million gallons of ethanol since the processing facility was established in 2005.
The company has already conducted a pilot test to see how well the ethanol blend fuel would work in motor vehicles here. Indications are that none of the vehicles tested have developed any adverse reaction to the fuel blend, the company has said.
As a result the oil refinery will be introducing more ethanol blend fuel by the third quarter of this year.
john.myers@gleanerjm.com
