ETHANOL USE - LOGISTICS OF TRANSPORTING, STOCKING AND BLENDING ETHANOL USE - LOGISTICS OF TRANSPORTING, STOCKING AND BLENDING WASHINGTON, APRIL 25, 2006 WORLD BANK “Brazil’s Ethanol Experience and its Transferability” Seminar Paulo de Tarso Costa ALCOHOL AND OXYGENATES TRADING Paulo de Tarso Costa ALCOHOL AND OXYGENATES TRADING

It all began back in 1931…

Not an Ethanol Producer (Oil Company) Biggest Ethanol Purchaser/Marketer in Brazil (as a gasohol blender) Adequate Tank Farms and Extensive Pipeline Network Important Vessel Owner/Charterer Human Resources and Technical Ability Petrobras Institutional Role

Government action: Stimulated Ethanol production program in the 80’s (financial support) Petrobras participation: Guaranteed Ethanol purchase Technical studies (R&D) Transportation Blending Supply and Inventory management Brazilian Model

Anhyrous Fuel Ethanol (minimum 99.6 vol pct ethanol) National Petroleum Agency (ANP) Brazilian Specifications Used for blending into gasoline (E25 gasohol production) Product Quality

ItemUnitValue Method ASTM ABNT/ NBR Aspect-LFFIVisual Color-*Visual Total Aciditymg/l30 max9866D1613 Elect. Conduc.microS/m500 max10547D1125 Specific 20C max 5992D4052 Alcohol deg.deg. INPM99.3 min5992- Hydrocarbonsvol pct3.0 max Coppermg/kg0.07 max10893-

Colorless to yellowish if free from dye, whose application is allowed to the maximum of 20 mg/l, exception to blue color dye, which is restricted to aviation gasoline. LFFI: Limpid and free from impurities

Hydrated Fuel Ethanol (minimum 95.1 vol pct ethanol) National Petroleum Agency (ANP) Brazilian Specifications Automobile fuel (Flex Fuel vehicles) Product Quality

ItemUnitValue Method ASTM ABNT/ NBR Aspect-LFFIVisual Color-*Visual Tot.Aciditymg/l30 max9866D1613 Elect. Cond.microS/m500 max10547D1125 Specific mass 20C D4052 Alcohol degree deg. INPM Hydrocarbo ns vol pct3.0 max Others: Residue, pH, Chlorides, Sulfates, Iron, Sodium

Colorless to yellowish if free from dye, whose application is allowed to the maximum of 20 mg/l, exception to blue color dye, which is restricted to aviation gasoline. LFFI: Limpid and free from impurities

Anhydrous Ethanol 8,7% Ethanol Market-Share: 7,0% + 8,7%  15,7% Fuel consumption in Brazil (2004)

Basic Logistics 33 per cent of market requires Ethanol transpor- tation

Distribution Network

Main Pipeline Network Conchas

Tietê Paraná Waterway REPLAN REPAR

Main Production Areas in Brazil Ref.:Brazilian Government 61% 3% 8% 1% 2% 5% 4% 5% 2% 1% Center-South - 89% Production North/Northeast - 11% Production Maceió 55,000 dwt 130,000 dwt Rio de Janeiro Paranaguá 40,000 dwt ExportTerminalsExportTerminals

Logístics for Ethanol Export

Ethanol From Plant to Loading Port 220 THOUSAND CU MT TANKAGE

The Venezuela Project Introduce Ethanol in Venezuela; Generate jobs; Create market for future local industry; Technology transfer of Petrobras 30 yr experience; Latin America energy integration; Reduce impact of high oil prices. Petrobras and PDVSA

Cooperative Work Petrobras and PDVSA Puerto La Cruz

Quality Control on Shore: Plant Plant Tanks Analysis: ANP specs guaranteed Petrobras Receiving Refinery Receiving Trucks tested for Density and Ethanol content. Farm tanks analysis: ANP specs certified Pumping Operations Pipeline quality controls Aspect and Color – upon interface passage, first 500, 1,000, 1,500, 2,000, 3,000 cubic meters and last 500 cubic meters

Aspect, Color, Hydrocarbon Content, Ethanol Content (INPM deg.) - first and last 500 m3 Petrobras Export Refinery Farm tanks analysis: ANP specs certified Independent Inspector Laboratory: (Shore Tanks) ANP specs

Quality Control on Vessel (Loading Port):  Vessel line sample  Sampling of first 300 cubic meters loaded in each tank for quality approval  Vessel individual tanks analysis  Composite sampling ANP Specs Independent Inspector Laboratory

Main Quality Characteristics of Product LOADING PORT – RIO DE JANEIRO  REFINERY TANKS Ethanol content 99,7 INPM 99.6 INPM Hydrocarbon content 0.0 vol pct 0.0 vol pct  VESSEL TANKS (individual tanks and ship’s tanks composite sample) Ethanol content 99.6 INPM Hydrocarbon content 0.0 vol pct

PETROBRASTerminalsPETROBRASTerminals

PARANAGUÁ

MACEIÓ

RIO DE JANEIRO

SÃO SEBASTIÃO

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