BAAC gets behind Sea Horse on ethanol

The two sides yesterday signed a memorandum of understanding to cooperate on projects for crops for fuel pro¬duction.

Thirapong said that both ethanol producers and farmers engaging in biofuel production would benefit from the project. The BAAC this year targets to lend Bt30 billion to Bt40 billion for biofuel production nation¬wide, he said.

For this project, the amount of lending would depend on how many farmers join the project at Nakhon Ratchasima. Borworsak Uwanno, chairman of Sea Horse, said the factory is under construction and would be completed next year. The company would produce about 650,00 litres of ethanol per day, he said.

Siritaj Rojanapruk, chief executive officer, said the company had invested about Bt4 billion in its factory and experimental field covering 7,000 rai. The factory will need raw material supplies of 1 mil¬lion tonnes of tapioca a year. Tapioca production in Nakhon Ratchasima is about 5 million tonnes a year.

The cost of production for a litre of ethanol is about Bt20, said Siritaj. The government plans to promote E20 and E85 fuels and it would benefit both the company and farmers, he said.

"Though oil prices are cur¬rently falling, strong uncertain¬ty remains over future prices," he added.

Meanwhile, oil trade changed little after tropical storm Gustav strengthened to become a hurricane in the Caribbean Sea, raising concern it may disrupt oil production in the Gulf of Mexico.

Hurricane Gustav headed towards Haiti and the Dominican Republic with 128 kph winds, a hurricane centre advisory said yesterday. Prices gave up earlier gains after tankers in the Mediterranean port of Ceyhan resumed load¬ing from a BP pipeline three weeks after an explosion shut the link.

"Gustav's direction and wind speed over the next 24 to 36 hours will be key," said Robert Laughlin, senior broker at MF Global in London. "It's too early to predict whether it will churn into the Gulf of Mexico but it could well pose a threat to off¬shore production and ultimate¬ly onshore refining."

Crude oil for October deliv¬ery traded for $114.57 (Bt3,920) a barrel, 54 cents lower, on the New York Mercantile Exchange at 9.39 am London time yes¬terday. Prices are up 59 per cent from a year ago. Yesterday, futures rose 0.5 per cent to set¬tle at $115.11.

Brent crude oil for October settlement was at $113.96 a bar¬rel, down 7 cents, on London's ICE Futures Europe exchange at 9.24 am London time.