The proposed joint venture, which still requires regulatory approval, will produce and commercialize ethanol and power from sugar cane and distribute a variety of industrial and transportation fuels through a combined distribution and retail network in Brazil. It will also explore business opportunities to produce and sell ethanol and sugar globally.

“The proposed joint venture is set to pool our complementary businesses, enhance our growth prospects in ethanol production globally and support our growth platform for our retail and commercial fuels businesses in Brazil,” said Mark Williams, Shell Downstream Director. “Over the next 20 years, sustainable biofuels are one of the most realistic commercial solutions to reduce CO2 emissions from transport”.

“While there is still plenty of integration planning to do before we launch the proposed joint venture, this is an important milestone in our effort to create one of the world’s most competitive sustainable biofuels companies,” said Rubens Ometto Silveira Mello, Cosan’s Chairman of the Board and non-executive Chairman-elect of the proposed joint venture.

With annual production capacity of over 2 billion litres, the proposed joint venture will be one of the world’s largest ethanol producers. The inclusion of Shell’s interests in Iogen Energy and Codexis would enable the joint venture to deploy next generation biofuels technologies in the future.

The company will also generate electricity from sugar cane bagasse in cogeneration plants at all sites. Ten cogeneration plants are already operational. With total annual sales of about 18 billion litres of fuels, the proposed joint venture will have a competitive position in the Brazilian fuels distribution market built upon a network of about 4,500 retail sites.

Today’s agreement follows the signing in February of a non-binding memorandum of understanding. With the transaction terms agreed, Shell and Cosan, which remain as competitors, will now focus on securing regulatory approvals and starting integration planning before launching the new company.”

Source: Press Release

According to the press release, “Greenergy International Ltd, one of the biggest fuel suppliers in the UK, has announced that it has entered into a joint venture with Bauche Group (30%), a leading expert in the sugarcane industry, to source and sell sustainable Brazilian bioethanol. The new business, Greenergy Brazil headquartered in Sao Paulo, has been established to meet increasing demand for UK RTFO and EU Renewable Energy Directive compliant bioethanol.

Greenergy supplies a number of UK fuel companies and forecourt operators with sustainable Brazilian bioethanol and has established an extensive gold standard sustainability audit programme for producers in Brazil. The joint venture will help secure future supplies of sustainable product, reduce the overall cost of buying bioethanol and secure Greenergy’s role as the leading inland supplier to the UK and Europe. In 2010 traded volumes are expected to exceed 600,000 cbm, of which approximately 50% will be supplied by Greenergy into the UK market. These levels are expected to more than double over the next 3 years as obligated biofuel inclusion levels increase across Europe.

The new business brings together two of the leading players in the development of Brazil’s bioethanol export market. Bauche Group has an established presence in Brazil with extensive trading relationships with local mills and has been working with Greenergy to establish best practice suppliers of sustainably sourced and traceable bioethanol for movement into the UK and Europe for a number of years.

The joint venture will strengthen Greenergy’s commercial relationships with Brazilian producers and, as a significant direct inland buyer, will give it further leverage in influencing the take up of its sustainability criteria by bioethanol mill owners. It will also underpin the delivery of Greenergy’s UK Flexibio product guaranteeing RTFO or RED compliant biofuel to major oil companies to offset their RTFO and RED compliance risk.”

Source: Greenergy Press Release

According to Press Release, “As further evidence of their commitment to renewable energies, GE (NYSE: GE) and Brazil’s federal energy company, Petrobras, today celebrated the world’s first use of sugarcane-based ethanol in a gas turbine system to produce electricity on a full commercial scale. The operation, at the Juiz de Fora Power Plant, is a significant milestone for Brazil.

Ethanol derived from sugarcane in Brazil is one of the most efficient biofuels in terms of energy balance and carbon emissions. The benefits of this alternative fuel are substantial: it is a renewable energy source and its combustion reduces atmospheric emissions, especially NOX.

The Juiz de Fora Power Plant is a simple-cycle, natural gas plant with a total capacity of 87 megawatts, located in the south of Minas Gerais state, approximately 180 kilometers (110 miles) north of Rio de Janeiro. The plant has two GE LM6000 gas turbines, one of whose combustors has been modified by GE to enable the use of ethanol, making it dual-fuel (ethanol and natural gas). This enhances the plant’s energy security and reliability by providing a valuable alternative fuel source for the power plant that previously had only one available fuel.

As the world’s second largest producer of ethanol and the world’s largest exporter, Brazil will benefit from incorporating ethanol into its thermal generation profile because of the abundant fuel supply. The country’s 35-year, large-scale experience in ethanol use is based on efficient agricultural technology for sugarcane cultivation, producing 26.9 billion liters (or about 7.3 billion U.S. gallons) in 2008, according to data provided by the Federal Government.

Flexibility is a key characteristic of GE’s aeroderivative product portfolio. From supporting a wide variety of operating profiles to fast, easy, modular maintenance programs, GE’s aeroderivative gas turbines support the operating needs of its global customers. To better support a rising need for reduced environmental impact and improved plant economics, GE’s aeroderivative team is focused on developing alternative fuel solutions that will further augment the portfolio’s existing performance flexibility.

“GE’s continued investment in research and development of aircraft engines and industrial gas turbines enables the LM aeroderivative gas turbines to lead in technology, performance and operational flexibility while providing value to the customer,” said Darryl L. Wilson, president and CEO—Aeroderivative Gas Turbines for GE Power & Water. “The LM series has the ability to operate with a variety of fuels and features advanced emission control technologies.”

There will be five months of demonstration runs to validate the use of ethanol as an alternative fuel, as well as to ensure that emissions are within the expected limits. GE is providing the conversion technology, engineering and field support during conversion and commissioning.

“This kind of collaboration demonstrates the exciting developments that can be achieved to provide economic, environmental and local solutions for our customers,” said Wilson. “We want to be a leader when it comes to providing more efficient and reliable power from a variety of fuel sources for our customers and we’ll continue to pursue these types of collaborative opportunities to develop those solutions.””

Source: Press Release

According to the Press Release, “Bunge Limited (“Bunge”) (NYSE: BG) today announced that it has entered into an agreement to become the 100% owner of Usina Moema Participacoes S.A. (“Moema Par”). Moema Par is a holding company that wholly owns one sugarcane mill in Brazil and has ownership interests in five others. Together, the cluster of six mills (“Moema Group”) has an annual crushing capacity of 15.4 million metric tons. With this transaction, Bunge will have a 60% effective share of the total capacity, representing Moema Par’s wholly owned mill and its interests in four of the five other mills.

The transaction will be structured as a share exchange, and under the terms of the agreement, shareholders in Moema Par will be entitled to receive approximately 7.3 million common shares of Bunge Limited, which includes a payment of approximately $36 million in respect of working capital. Based on yesterday’s closing price of Bunge’s common shares, the value of the transaction is approximately $896 million, including approximately $480 million of net debt and excluding this working capital amount. The final number of shares to be issued will be based on the amount of net indebtedness and working capital of Moema Par at closing.

In the coming weeks, Bunge may enter into agreements to secure some or all of the remaining interests in the mills that constitute the Moema Group. These transactions would be on economic terms consistent with the Moema Par transaction.

If, in addition to completing the Moema Par transaction, Bunge secures 100% of the remaining outstanding interests in the Moema Group mills, shareholders in Moema Par and other shareholders in the mills would receive a total of approximately 13.4 million common shares of Bunge Limited, which includes a payment of approximately $60 million in respect of working capital. Based on yesterday’s closing price of Bunge’s common shares, the total value of all transactions would be approximately $1.48 billion, including approximately $710 million in net debt and excluding this working capital amount, subject to adjustment as described above.

Bunge expects that all of these transactions would be accretive to earnings per share in the first 12 months.

“This transaction fulfills Bunge’s strategic goal of building a large-scale, fully integrated business in sugar and bioenergy,” stated Alberto Weisser, Chairman and CEO of Bunge Limited. “It adds significant scale to our current milling operations and enables us to vary production among multiple sugar and ethanol products, according to market conditions. The Moema Group cluster is also strategically located near large domestic markets in Brazil and has excellent access to export logistics systems. All of these strengths make it a perfect fit with our global trading and marketing operations.”

The Moema Group cluster is located on the border of Sao Paulo and Minas Gerais states, the two largest domestic ethanol markets in Brazil. The mills benefit from cost savings due to their cluster configuration, and have favorable road and rail access to three of Brazil’s largest export ports (Santos, Paranagua and Vitoria). The cluster can produce two types of sugar (raw and crystal) and two types of ethanol (hydrous and anhydrous). It has co-generation facilities, is self-sustaining in terms of energy requirements and sells excess power to the grid. A majority of the cluster’s sugarcane is harvested mechanically, and the topography of the region should ultimately allow for approximately 95% mechanization.

“For sugar and bioenergy, Brazil is an ideal location in which to invest,” continued Weisser. “It has a fast-growing domestic market for ethanol and, because it boasts the world’s lowest-cost production, is well-positioned to expand its exports of both sugar and ethanol. Bunge is pleased to build on its commitment to the economy and people of Brazil.”

Bunge Limited has agreed to file a registration statement for the common shares issued to the new shareholders, which will allow the shareholders to resell their common shares from time to time. In addition, the shareholders participating in the transactions have agreed, during the 18 month period after the closing, to certain volume and other restrictions with respect to sales of their common shares.

The closing of the transaction announced today is expected to occur within the next 45 days, subject to certain conditions, including reaching satisfactory agreements with the shareholders in the Moema Group mills not wholly owned by Moema Par.

Credit Suisse AG is serving as financial advisor to Bunge, and Itau-BBA is serving as financial advisor to the Moema Par shareholders.”

Source: Press Release