Brazil Petrobras not to invest in ethanol logistics project in 2013 - report

Oct 29, 2012 - Brazil's federal oil and gas major Petrobras (SAO:PETR3) has decided not to invest in 2013 in the project for comprehensive logistics system for multimodal transport and storage of ethanol of its affiliated firm Logum Logistica SA, Brazilian news agency Agencia Estado reported on Friday.
Petrobras' decision is in line with its cost-optimisation programme which will redirect the company's resources to projects in the core business areas, Alberto Guimaraes, president of Logum Logistica, told the news agency.
Logum Logistica was set up in March 2011 by Petrobras, the transport arm of local builder Odebrecht, sugar and ethanol producers Raizen and Copersucar, the oil and gas unit of construction firm Camargo Correa, and the logistics division of pipeline developer Uniduto. The first four hold 20% each in Logum, while Camargo Correa's unit and Uniduto own stakes of 10% each.
The ethanol system is seen to absorb investments of BRL 7 billion (USD 3.453bn/EUR 2.676bn) through 2020. It will involve an ethanol pipeline of some 1,300 km (807.8 miles), connecting Petrobras's refinery Replan in Paulinia, southeastern Brazil, to the main ethanol-producing states Sao Paulo, Minas Gerais, Goias and Mato Grosso, Agencia Estado reminded.
Although Guimaraes did not reveal what is the exact amount of Petrobras' suspended investment, he said the other shareholders in Logum will discuss options to compensate in order to avoid a dilution of Petrobras' shareholding in the logistics player. The rest of Logum's owners may contribute with additional investments to be later repaid by Petrobras. This, however, will only be decided in mid-2013, the executive reportedly added.
(BRL 1 = USD 0.493/EUR 0.382)

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