VIENTIANE - South Korea's TN Energy Co is teaming up with Lao State Fuel Co to set up a joint venture to produce bioethanol fuel called Power Gasoline (PG) for sale in the country.
The joint venture, to be called Lao K-tech Co, will be established this year. The new company will be located at Dongphosy village in Hadxaifong district, Vientiane.
The joint venture agreement was signed on March 4 by Lao State Fuel Deputy Directors Anousinh Pholsena and Phaiboun Phomphaphithack, TN Energy Chairman Myung Jai Yoon and President Joo Kyung Choi.
In the first year, the two companies will work together to survey areas for growing the raw materials, especially cassava and sugarcane, for use in producing bioethanol.
To meet its needs, the companies will plant 40 percent of the raw material, while the rest will be bought from local farmers at the current market price.
In addition, some other mixed raw materials, especially the main substance called Rod, a multifunctional additive, will be imported from Korea during the first or second year of production.
TN Energy has invested US$34 million in the project and expects to produce 1.2 million litres of Power Gasoline a mont h once the project is up and running.
In turn, Lao State Fuel will be responsible for allocating locations and storage space as well as finding markets to sell the product.
Speaking at the signing ceremony, Lao State Fuel Technical Staffer Phoukhong Keolakhone said the idea to establish the new company came after seeing the progress made in producing and using Power Gasoline during a pilot project carried out in 2013.
He Highlighted that the project was a cooperation between the Lao State Fuel Company and Korea's TN Energy Company.
During the pilot project, TN Energy imported ethanol, naphtha and Rod to make Power Gasoline in Laos. After that, the two companies were able to produce 500 litres of Power Gasoline to meet the national standard.
Phoukhong explained that the two companies ran trials using the Power Gasoline on two types of new car both running in Vientiane and the provinces.
The trial showed that the car used 133 litres to cover a distance of 1,270km in Vientiane and used 46 litres to cover 663km from Vientiane to Pakxe.
Phoukhong added that the cars were checked using a computer system at the Kolao Group centre after using the Power Gasoline, saying “The results of the checks were satisfactory because the quality of the biogas matched the national standard.”