Shell and Cosan sign 2 bly ethanol deal
The Netherlands-based energy major Shell and Brazilian ethanol manufacturer and trader Cosan have formed a joint venture (JV) to produce 2 billion litres a year of ethanol.
The $12 billion (€8.6 billion) JV will also generate power, and the supply, distribution and retail of transportation fuels.
‘We see joining with Cosan as a way to grow the role of low-carbon, sustainable biofuels in the global transportation fuel mix,’ Mark Williams, Shell’s downstream director, says. ‘The joint venture would also enable Shell to set up a material and profitable biofuels business, with the potential to deploy next generation technologies.’
Cosan has a sugarcane crushing capacity of 60 million tonnes a year from 23 mills. Co-generation occurs in seven existing plants, two under construction and a further three to be built in the next three to four years.
Under the terms of the Memorandum of Understanding (MoU), both companies would contribute certain existing Brazilian assets to the JV. In addition, Shell would contribute a total of $1.625 billion in cash, payable over two years.
Shell’s equity interests in Iogen and Codexis would potentially enable the JV to deploy next generation biofuels technologies in the future.
The deal would also enhance both companies’ growth prospects and market position in the retail and commercial fuels businesses in Brazil.
With a network of about 4,500 retail sites and a total annual throughput of about 17 billion litres, the JV would have a leading position in the fuels retailing market in Brazil, with strong potential for synergy capture and future growth.
The $12 billion (€8.6 billion) JV will also generate power, and the supply, distribution and retail of transportation fuels.
‘We see joining with Cosan as a way to grow the role of low-carbon, sustainable biofuels in the global transportation fuel mix,’ Mark Williams, Shell’s downstream director, says. ‘The joint venture would also enable Shell to set up a material and profitable biofuels business, with the potential to deploy next generation technologies.’
Cosan has a sugarcane crushing capacity of 60 million tonnes a year from 23 mills. Co-generation occurs in seven existing plants, two under construction and a further three to be built in the next three to four years.
Under the terms of the Memorandum of Understanding (MoU), both companies would contribute certain existing Brazilian assets to the JV. In addition, Shell would contribute a total of $1.625 billion in cash, payable over two years.
Shell’s equity interests in Iogen and Codexis would potentially enable the JV to deploy next generation biofuels technologies in the future.
The deal would also enhance both companies’ growth prospects and market position in the retail and commercial fuels businesses in Brazil.
With a network of about 4,500 retail sites and a total annual throughput of about 17 billion litres, the JV would have a leading position in the fuels retailing market in Brazil, with strong potential for synergy capture and future growth.
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