Japan Biofuels eyes 700,000 barrels ethanol imports in 2010-2011

Tokyo (Platts)--10Apr2007

Japan Biofuels Supply expects to import some 109,565 kl (689,142 barrels)
of ethanol in the 2010-2011 fiscal year to produce 252,000 kl ETBE, senior
company officials said Tuesday.
The ethanol imports would cover around 30% of the total ETBE volume of
840,000 kl that Japan Biofuels, a new joint venture between members of the
Petroleum Association of Japan, aims to use as a gasoline additive.
The remaining 400,000-500,000 kl would be imported as ETBE, one official
said.
A a visit to Brazil by a delegation from the venture in March, Japan
Biofuels expressed confidence in being able to secure the ethanol or ETBE
needed to meet its targets.
During the visit, Japan Biofuels officials attended the March 13-15 Sugar
and Ethanol Brazil conference in Sao Paulo and met with senior officials at
major Brazilian ethanol producers including Cosan and Crystalsev.
"After talks with the Brazilian producers, we are convinced that Brazil
would have surplus ethanol for export," one official said. "However, we will
also examine opportunities to import ethanol from the US and even Asia," he
added.
The PAJ decided last year to consider using ETBE as a blending component
for gasoline from 2010. The PAJ has called on refiners to adopt ETBE-blended
gasoline in 2010-2011, starting with 20% of their total gasoline sales.
Japan's gasoline demand stood at about 1.05 million b/d in 2006.
Japanese refiners are looking at importing ETBE from Europe until they
are able to produce it themselves. France began using ETBE as a gasoline
component in 1993, followed by Spain in 2000 and Germany in 2004.
With a growing number of unused MTBE facilities being turned into ETBE
production units in Asia, Japan Biofuels hopes to find sources of ETBE import
closer to home.
The PAJ received its first spot cargo of 7,800 kl of ETBE from France at
Nippon Oil's 340,000 b/d Negishi refinery last Friday to start selling 7%
ETBE-blended gasoline at 50 retail stations in the Tokyo area from April 27.
This is a pilot project that will lead to the adoption of ETBE-blended
gasoline in 2010-2011. All the imported ETBE will be blended with regular
gasoline at the Negishi refinery for the pilot project.
The refiners participating in the pilot project plan to blend a total
12,000 kl of ETBE with gasoline in the 2007-2008 fiscal year and also buy
similar spot volumes over the next few months, a PAJ official said.

NIPPON CONVERTING MTBE UNIT
Nippon Oil is overhauling its 100,000 mt/year MTBE production unit at the
Negishi refinery and hopes to produce ETBE by the autumn of 2009.
The PAJ plans to boost its use of ETBE as a gasoline additive to 200,000
kl by fiscal 2009-2010, a big jump from the planned 16,000 kl in fiscal
2008-2009. At present, use of ETBE blended with gasoline stands at 12,000 kl.
Three other refiners--Idemitsu Kosan, Cosmo Oil and Japan Energy--have
MTBE production units but have not yet clarified whether they will follow
Nippon Oil and use the units to produce ETBE.
--Takeo Kumagai, takeo_kumagai@platts.com
--E Shailaja Nair, shailaja_nair@platts.com