A Green Tie-up

Friday, September 19, 2008

Taken from the article "Basic Energy, Canadian firm tie up for bioethanol project" by Zinnia B. Dela Peña on the Business Section of the Philippine Star, Sept. 16, 2008

Basic Energy Corp., has entered into a memorandum of understanding with Canadian-based Nexum Energy Corp. to jointly develop a bioethanol plant in the Philippines. In a disclosure to the Philippine Stock Exchange, Basic Energy said the proposed joint venture project involves the development and operation of a 200,000 liter per day ethanol plant using cassava as feedstock.

The Plant, to be located in Zamboanga del Norte, seeks to produce up to eight megawatts of green power, natural gas and organic fertilizers.

Nexum has exclusive sales and marketing rights to the Philippines for the "Nexum Technoology". It owns, licenses, constructs, operates and markets EnviroPlus, a proprietary, patent-pending technology expected to revolutionize the conventional ethanol industry.

EnviroPlus combines proven conventional front-end ethanol production and back-end biogas technologies. It is expected that this combination will formulate the most energy-efficient ethanol facility.

Jose Reyes, Jr., executive vice-president and treasurer of Basic Energy, said Nexum is one of three foreign companies the company is in talks with as possible strategic operating and financial partners for its proposed bioethanol projects.

Aside from the Philippines, Nexum is planning to build ethanol plants in Indonesia and Vietnam, Reyes said.

The ethanol project is in line with Basic Energy's tie up with EcoMarketFarms Inc. to expand their cassava project in the Zamboanga peninsula. The deal is expected to jumpstart the agricultural operations of Basic Energy and generate initial revenues from the sale of cassava chips to local animal feed manufacturers and eventually to supply the feedstock requirements of the planned ethanol plant.

Under the agreement, the two corporations will set up joint venture where Basic Energy will provide the capital while EcoMarketFarms will provide the business and management plans for the project.

Basic Energy will purchase EcoMarketFamrs' cassava plantation for P12.5 million, payable through shares and cash.

Basic Energy aims to be a leading player in the exploration, production and supply of alternative fuels and renewable energy, oil and allied products and services.

Hoping to capitalize on the anticipated demand for fuel with mandatory five percent blend of bioethanol with gas by May 2009, basic Energy, through wholy-owned unit Basic Biofuels, will initially build two bioethanol plants estimated to cost P6.74 billion.

Based on a forecast by the Department of Energy, domestic bioethanol demand is seen to reach 309 million liters per annum by 2009 and is seen to increase further to 664 million liters by 2011 and 713 million liters by 2013.


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