Repsol (NYSE: REP), a major player in international oil and gas, has entered the biofuel sector with the formation of Kuosol, a joint venture with KUO Group, one of Mexico’s largest industrial conglomerates.
Together the companies intend to plant and cultivate 10,000 hectares of jatropha in Yucatan, Mexico, principally on third party lands. It is estimated that agricultural development will be completed in the next 3 years, allowing industrial production to start in 2013 and to reach full capacity by 2016.
The companies plan to harvest 44 million litres of crude
oil for biofuels. The firms anticipate comprehensive utilization of
biomass from forest plantations, cogeneration of steam and power of 16
megawatts (MW) per year for consumption, and the sale of surplus fuel.
Under an agreement signed Monday in Madrid, each firm will have a 50% stake in the new $80 million venture.
“Biofuels will be a key part of the company’s future growth,” Antonio Brufau said. “The creation of Kuosol is an important step in the development of Repsol New Energy strategy.”
Kuosol will be headquartered in Mexico and will focus on the development of bioenergy from the cultivation of the jatropha curcas, an oilseed with a high content of non-edible oil.
In a foreshadowing of today’s announcement, Repsol in April 2010 created its New Energy unit to identify and develop businesses related to bioenergy, renewable energy for transport and other areas which present synergies with the company’s existing activities.
The KUO Group’s activities in the sector go back to 2008, when it began a pilot project in the Yucatan state of Mexico, producing bioenergy from non-edible second generation crops on land not suitable for agriculture.
The first phase was developed with more than 300 hectares of jatropha curcos oilseeds to obtain an oil to produce biodiesel.
KUO Group said the founding of Kuosol will allow it to harness vacant lots used for the pork-rearing business, to reuse recycled water on its farms, rich in nutrients for irrigation, and provides easy access to carbon credits under the Clean Development Mechanism (CDM) scheme.
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