Korean company enters JV to produce bioethanol in Laos

South Korea's TN Energy has entered into an agreement with Lao State Fuel to set up a joint venture (JV) to produce Power Gasoline-branded bioethanol fuel.

The JV, to be called Lao K-tech, will be established later this year and it will be located at Dongphosy village in Hadxaifong district, Vientiane, Laos.

In the first year, the companies will work together to survey areas for growing feedstock, namely cassava and sugarcane.

The partners are planning to grow 40% of their feedstock, while the rest will be bought from local farmers at the current market price.

Additionally, some other feedstocks – especially a substance called Rod, a multifunctional additive – will be imported from Korea during the first or second year of production.

TN Energy has invested $34 million (€30.8m) in the project and expects to produce 1.2 million litres of Power Gasoline a month once the project is up and running.

In turn, Lao State Fuel will be responsible for allocating locations and storage space as well as finding markets to sell the product.

Speaking at the JV agreement signing ceremony, Lao State Fuel technical staffer Phoukhong Keolakhone said the idea to establish the new company came after seeing the progress made in producing and using Power Gasoline during a pilot project carried out in 2013.

During the pilot project, TN Energy imported ethanol, naphtha, and Rod to Laos and the companies were able to produce 500l of Power Gasoline to meet the national standard.

Driving trials showed that the used car consumed 133l to cover a distance of 1,270km in Vientiane and used 46l to cover 663km from Vientiane to Pakxe.

Phoukhong added that the cars were checked using a computer system at the Kolao Group centre after using Power Gasoline.

"The results of the checks were satisfactory because the quality of the biogas matched the national standard," he said.