Logum Logistica Wins $924 Million Loan for Ethanol Pipeline

Bloomberg
By Stephan Nielsen - Sep 29, 2011 4:39 PM CT .

Logum Logistica SA, a joint venture backed by Petroleo Brasileiro SA (PETR4), won a 1.7 billion real ($924 million) loan from development bank Banco Nacional de Desenvolvimento Economico e Social for a project to transport Brazilian ethanol by pipeline.

The bridge loan will cover a first phase of the project that includes three sections of pipeline in the states of Sao Paulo and Minas Gerais, Sao Paulo-based Logum Logistica said in a statement today.

Trucks currently move almost all Brazilian ethanol, transportation that costs an average of 8 centavos a liter, according to Joao Chierighini, logistics manager at Sao Paulo- based ethanol trader Bioagencia. Logum will be able to charge mills a significant fee to use the pipeline, which can reduce freight costs by as much as 30 percent, he said.

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