Russia to Start Building Bioethanol Plant in 2007
Date: 21-Apr-06
Country: RUSSIA
Author: Aleksandras Budrys
The plant will be placed in the Volgograd region, one of Russia's biggest grain-growing areas.
"Construction of the plant is expected to start in the spring of 2007 and is estimated to take two years," Alexander Shilin, deputy head of the Volgograd regional administration, told a bioethanol conference.
The plant, valued at US$200-250 million, would produce 300,000 tonnes of bioethanol a year for export to the European Union.
It will be built in the town of Mikhailovka and would consume over 900,000 tonnes a year of feed wheat, said PricewaterhouseCoopers, which acts as financial consultant to the project.
Shilin said about 40 percent of the investment required for the plant would be supplied by a consortium of at least three local companies. The rest would be borrowed.
Ethanol, or ethyl alcohol, is on its way to trading like a mainstream world commodity as soaring prices for crude oil and gasoline push consumers to use more "green" fuel produced from renewable resources, like grain, maize or sugar.
The Volgograd region, one of Russia's main bread baskets, aims to increase grain output to between 6.0 million and 6.5 million tonnes by 2010 from 4.0 million currently, Shilin said.
He said 10 to 12 pig-breeding farms, each with capacity for 100,000 animals, would be built near the plant to use the distillers' dried-grain solubles -- a byproduct of bioethanol.
An analyst said existing legislation discourages the use of ethanol for domestic consumption due to high taxes. Bioethanol for export is exempt.
"Currently, even if you build a plant, you will only be able to export the ethanol it produces," Alexander Maximov, director of the government's Research Centre for Agricultural Production Development Forecasts and Ecology Problems, told Reuters on the sidelines of the conference.
