Quang Ngai strikes deal on bio fuel projects

The Viet Nam National Oil and Gas Group (PetroVietnam) has reached an agreement with the authorities of central Quang Ngai Province to co-operate in investment and development of bio fuel production and a bio fuel market in the province.

At present, PetroVietnam is building the Dung Quat Bio-Ethanol Plant in Quang Ngai, expected to come under trial in October and begin production on November 15.

For its part, the People’s Committee of Quang Ngai would manage the planting of cassava to feed the plant.

Provincial authorities would create favourable conditions for farmers to join the operation, including contribution of capital to the plant and technical services for growing cassava.

Meanwhile, PetroVietnam would invest in the region to ensure economic effectiveness and environmental protection.

The group would have incentives for farmers and sign contracts with them to buy their product. It also would invest in infrastructure, including roads, irrigation and waste water treatment systems.

Under the agreement signed last Friday, the two sides would co-operate in developing a distribution system for bio petrol E5 and E10.

Ethanol fuel mixtures have “E” numbers which describe the percentage of ethanol in the mixture by volume, for example, E5 is 5 per cent anhydrous ethanol, distilled from cassava, and 95 per cent petrol.

The parties planned to develop the bio fuel market in the province before selling nationwide as the Government required.

In the first five months of this year, the major distributor of E5, PV Oi, which is a member company of PetroVietnam, said it had sold 4.2 million litres of E5 fuel through 30 petrol stations.

Phan Dang Tuat, head of the Ministry of Industry and Trade’s Institute of Industrial Strategic and Policy Studies, said the consumption of E5 on the local market would continue to remain low if the State did not create preferential policies for distributors and customers of E5, and schedule a date for its compulsory use.

Under the plan to develop bio-fuel by 2015 and towards 2025, Viet Nam would produce 150,000 tonnes of bio-fuel in the 2010-15 period and 1.8 million tonnes of bio-fuel by 2025. The bio fuel would be used nationwide from 2014.

PV Oil deputy general director Le Xuan Trinh said the company would continue to invest in its distribution system and increase the number of stations that sell E5 to around 300 or 400. — VNS

Tags: Bio-fuel