BP continues to expand its investment in Brazilian biofuels, announcing a $350 million cash infusion into a sugarcane ethanol processing plant there.
Tropical, one of BP’s three producing ethanol facilities in Brazil, will get a new mill and double its processing capacity. Construction will begin next year, the company said in a press release. The completed expansion will allow Tropical to process 5 million tons of sugarcane and produce 450 million litres of ethanol equivalent per year, BP said.
The expanded facility is expected to be in full operation by late 2014 or early 2015.
“This expansion reinforces our commitment to the Brazilian sugarcane industry and will enable us to grow our business in the future,” said Mario Lindenhayn, CEO of BP Biofuels Brazil. “We have been improving our operational efficiency and this announcement marks a further milestone in delivering our biofuels strategy.”
BP announced last year it would take full ownership of the plants operator, Tropical BioEnergia S.A., buying out its partners’ 50 percent stake for about $71 million. Lindenhayn said at the time that facility expansions would grow supply to both Brazilian and foreign markets.
Brazil, the world’s largest sugarcane ethanol producer, had a poor sugarcane harvest in 2011 leading to an 18 percent drop in ethanol production. However, the country is rebounding in 2012, according to the U.S. Energy Information Administration.