MANILA, Philippines – Listed Basic Energy Corp. is exploring the use of sugarcane, cassava, sweet sorghum and other feedstocks for two ethanol plants that it plans to set up, as it capitalizes on the local biofuel rush.

Basic Energy plans to develop two integrated multiple feedstock ethanol plants with an annual capacity of some 80 million liters.

It may partner with Metro Pacific Investments Corp., which is looking at a joint venture with Basic Energy to engage in the production of ethanol and other alternative fuels.

“This should place the company in a strong position to take advantage of the government’s thrust to mandate the increasing use of biofuels for gasoline and diesel engines to cut the country’s dependence on imported oil,” Basic Energy President and Chief Operating Officer Oscar L. de Venecia, Jr. said in a statement.

He said the company is looking at three sites for its first ethanol plants. One is its 200-hectare property in the Zamboanga Peninsula, where it will produce ethanol using cassava.

“Aside from sugarcane and cassava, we will also be exploring sweet sorghum and other higher ethanol-yielding feedstocks which will make our ethanol production more efficient,” Mr. de Venecia added.

The company has approved the proposal of Praj Industries of India for a 10-hectare sweet sorghum trial plantation on the local firm’s Zamboanga del Norte property to demonstrate the crop’s viability as an ethanol feedstock.

Basic Energy said Republic Act 9367 or the Biofuels Act of 2006 would make biofuel development a lucrative business for local energy companies. Locally produced ethanol must make up 5% of all locally distributed gasoline by January next year for an annual projected ethanol demand of 309 million liters, based on a study by energy advisory firm Merritt Partners Philippines.

With the law boosting ethanol’s mix in local gasoline to 10% in succeeding years, yearly ethanol demand should reach 664 million liters by 2011 and 713 million liters by 2013.

Countries like China and India have also mandated blending targets for biofuels with gasoline and other fuels. In Japan alone, annual ethanol demand is expected to hit 500 million liters by 2010.

But the local ethanol industry has yet to take off, with only two projects slated for operations this year and next, with a combined annual capacity of 36 million liters.

Merritt earlier said it expects oil prices to continue their record-breaking run through 2009, triggering persistent increases in the local price of gasoline. It said the Philippines has to develop its own fuel sources to sustain growth. Sustainably produced ethanol can provide a serious challenge to gasoline dominance in the Philippine market, it added.

Basic Energy earlier said it had signed a memorandum of agreement with Pilipinas Shell Petroleum Corp. for a possible supply of up to 50 million liters of bioethanol a year.

Basic Energy has broadened its business initiatives to include alternative fuels and renewable energy. It used to focus on the oil and gas exploration business.

The company has also signed a deal with Dubai-based Energy Services Group Ltd. (ESG) for joint development in the oil and gas business here and abroad.

ESG provides engineering, procurement, installation, construction and project management services in oil and gas operations, and has a network in the international energy industry. — Ava Kashima K. Austria, BusinessWorld

Source: http://www.gmanetwork.com/news/story/112010/economy/companies/firm-eyes-more-crops-for-zambo-ethanol-plants