Ecuador to roll out Argus-linked ethanol

OREANDA-NEWS. May 15, 2015. Ecuador's President Rafael Correa issued a decree that orders the gradual roll out of a 10pc ethanol blend nationwide, using the Argus US Gulf Coast ethanol price as an index.

According to the decree issued yesterday, the wholesale price of the new blend called Ecopais will be calculated based on the Argus ethanol price plus delivery from the US Gulf Coast to Ecuador and a K factor of \\$0.18 per liter.

The Ecopais plan is aimed at reducing Ecuador?s growing high-octane gasoline imports which it blends with locally produced low-octane gasoline to make 87-octane and 93-octane gasoline.

High-octane gasoline imports averaged around 55,000 b/d in 2014, up by 25pc from 2013, according to PetroEcuador figures.

State-owned PetroEcuador has already completed an E5 pilot plan in the coastal province of Guayas. Quito is looking for \\$940mn in investment to expand sugar cane cultivation and ethanol production to meet the new target.

According to a strategic sectors ministry official, a 5pc nationwide mandate will require Ecuador to expand domestic ethanol production from a current 35mn l/yr to 180mn l/yr. This in turn will demand rapidly expanding cane cultivation from a current 70,000 hectares to 104,000 ha. It will also require the expansion of the country's three privately owned ethanol plants and construction of new facilities.

Nationwide E5 distribution could be achieved by 2017, followed by the full E10 in 2018.

The government is currently considering a proposal from Houston-based Southern Chemical to import methanol from the firm's production facilities in Trinidad and Tobago. PetroEcuador could use the methanol to create an Ecopais blend with a 5pc ethanol and 10pc methanol content.