Basic Energy Corp. is planning to build a portfolio of around five to six bioethanol plants throughout the country over the long term in line with its bid to become the leading producer of alternative fuels and renewable energy resources.

Basic Energy is banking on its partnership with “big brother,” Metro Pacific Investments Corp. (MPIC) and possibly a foreign established and reputable ethanol plant supplier to get its proposed bioethanol projects started.

Joshue A. Camba Jr., chairman and chief executive officer of Basic Energy, said the company is aiming to become a major instrument in the country’s drive for energy self-sufficiency through clean, efficient and reliable energy sources.

Just recently, Basic Energy forged an agreement with MPIC to study the viability of establishing a joint venture company that will engage in the production of ethanol and other related fuels subject to the results of a due diligence study now being conducted by the First Pacific Co. Ltd.-led company.

The due diligence study is expected to be completed in September or October.

Basic Energy president and chief operating officer Oscar de Venecia Jr. said MPIC will most likely take a controlling stake in the joint venture should both parties decide to pursue the project.

“Since MPIC is a much bigger and powerful company than us, they would take the lead but we haven’t decided yet on the ownership structure of the joint venture firm,” De Venecia said.

Jose Reyes Jr., executive vice-president and treasurer of Basic Energy, said the company may also take in a foreign partner to provide technical expertise to the bioethanol project, which is Basic Energy’s roadmap to a more dynamic and stronger institution.
Hoping to capitalize on the anticipated demand for fuel with the mandatory five percent blend of bioethanol with gas by May 2009, Basic Energy through wholly-owned unit Basic Biofuels, will initially build two bioethanol plants estimated to cost P6.74 billion.

Construction of the first plant, located in a 22-hectare land in Gutalac, Zamboanga, is targeted in the first quarter of 2009. The plant will be capable of producing 150,000 liters of ethanol per day and 50 tons/day of CO2 and of generating eight megawatts power, approximately two years from the start of construction.

Reyes said the ethanol project will be funded 20 or 30 percent equity and the remaining 70-80 percent through debt.

The country needs around 15-20 ethanol plants by 2011 to meet mandatory blend requirement of the Biofuels Act of 2006.

Based on the forecast of the Department of Energy, domestic bioethanol demand is forecast to reach 309 million liters per annum by 2009 and is seen to increase further to 664 million liters by 2011 and 713 million liters by 2013.

Camba said the company is also hoping to supply bioethanol overseas given the strong ethanol demand growth in Aisa, particularly in Japan, China and India.

Source: http://www.philstar.com/business/78681/basic-energy-build-5-6-bioethanol-plants