Seaoil plans P1.2-B bio-ethanol plant

Amid the impending passage of the Biofuels Act into law, major independent oil player Seaoil Philippines Inc. is planning to put up a P1.2-billion bio-ethanol manufacturing plant.

SeaOil president Francis Glenn Yu said the facility, to be built by an affiliate, will produce 100,000 liters of ethanol per day. Construction of the plant is expected to take 18 months.

Yu said Seaoil has been offering ethanol-blended gasoline since August last year. The company converted all the gasoline being sold in its stations to E10, a biofuel blended with 10-percent bioethanol.

Ethanol is an alternative energy resource produced from crops such as corn, grain sorghum, wheat, sugar and other agricultural feedstock. It can be used as a transportation fuel, as a blend to gasoline, a component of reformulated gasoline, or a primary fuel with gasoline as blend.

Yu said he expects the ethanol plant to register revenues of P1.1 billion in the first year of operations.

The proposed Biofuels Act of 2006 will mandate the use of biofuels by blending five percent bioethanol with gasoline within two years from the effectivity of the act and one percent biodiesel with diesel within three months from the effectivity of the Act.

Ethanol, which is inherently high in oxygen content (35 percent), results in cleaner and more complete combustion when blended with unleaded gasoline, thereby reducing harmful tailpipe emissions.

It also reduces carbon monoxide and other toxic emissions by 30 percent and 22 percent, respectively.

Yu said the national economy will be the biggest benefactor of the government’s drive to make ethanol-blended gasoline available to the motoring public.

Seaoil is among the most aggressive new players in the oil industry after the introduction of deregulation policy in 1998. It has since established a steady market share, and is now considered as a major revenue earner among the new retail oil entrants.

The company has a total of 107 gasoline service stations nationwide. In the pipeline are 14 more retail stations, mostly in northern Luzon.

Seaoil expects revenues to grow to P3.6 billion this year from only P3.3 billion last year. As of October, revenues already reached P3 billion.

The company is eyeing an initial public offering of its shares in the second half of 2007 to raise funds for its expansion.

Oil refiners are required by law to list at least 10 percent of their outstanding shares on the local bourse by 2001. Poor market conditions have however delayed their mandated public offerings.

Among the oil refiners in the country, only Petron Corp. is listed at the stock exchange.