Valero expands into ethanol export market for 1st time
By Chris Prentice
NEW YORK, July 14 (Reuters) - Valero Energy Corp, one of the biggest U.S. oil refiners, is preparing to sell ethanol for export for the first time, the company said, betting on the $2 billion overseas market as U.S. demand remains plagued by political uncertainty.
The San Antonio-based oil refiner, the third-largest U.S. ethanol producer, has recently been offering export-grade ethanol to shippers and leasing tank space for it at St. Rose, Louisiana, opening a gateway to major markets in Asia and Brazil, three U.S. trade sources said.
For now, the material will be sold on a freight-on-board basis for shipment overseas, they said.
Ultimately, the company plans to sell its output and third-party production directly to buyers overseas, as it does with other fuel products.
"We are looking at increasing sales and expanding markets, including export markets," said Valero spokesman Bill Day.
He declined to confirm details of the plan or comment on them.
The move underscores the increasingly competitive nature of the overseas market as U.S. biofuels policy remains in flux and companies rush to sell in countries such as Brazil and the Philippines, where government mandates have helped drive demand.
The push abroad will pit Valero against Archer Daniels Midland Co, the country's top producer, privately-held Marquis Energy LLC, and Pacific Ethanol, which are also going after a slice of the export market. Continuación...