The agreement is the outcome of the breakdown of the memorandum of understanding the companies signed in May 2007 which was aimed at studying the feasibility of joint biodiesel production, marketing and distribution projects in the Brazilian, Portuguese and international markets.
Symbolically dubbed the Belem Project, the agreement foresees the production of 600,000 tons of vegetable oil per year in Brazil, which will be used to produce 500,000 tons of second generation biodiesel per year. Half of this volume will be produced in Portugal, while the other half at a location yet to be defined, said Petrobras. The product will be marketed in Europe, prioritarily in the Iberian market.
The studies and analyses carried out jointly by Petrobras and Galp, after the memorandum was signed, indicated the deal is feasible, leading to a business plan for the development of the Belem Project.
The investment agreement aims at setting the standards for the relationship between the parts for project development. The companies intend to deepen the studies to confirm the premises used in the business plan and materialize the partnership to deploy the foreseen operations and activities.
It also determines that, if project feasibility is confirmed, a company be incorporated with joint stock shared between Petrobras and Galp Energia with equal stakes, or their affiliates.
