BP Biofuels, a part of BP’s Alternative Energy business, has agreed to form a 50-50 joint venture with Brazil’s sugar and ethanol trader Copersucar to own and operate a major ethanol storage terminal in Brazil.

As part of the deal, the joint venture will own and operate Copersucar’s the Terminal Copersucar de Etanol located in Paulínia in the state of São Paulo. Financial terms of the deal were undisclosed.

BP said that the cooperation would help connect ethanol production with the country’s main fuels markets.

Located in one of the Brazil’s main fuels hubs, the terminal is currently owned and operated solely by Copersucar.

Through joint ownership, the ethanol storage complex will connect important ethanol production with flexible storage capacity close to the main ethanol consumer markets, thus supporting the strategies of both companies, BP said.

BP CEO Alternative Energy Dev Sanyal said: “We believe that biofuels offers one of the best large-scale solutions for decarbonising the transport sector and demand will continue to grow for decades to come.

“Brazil is one of the largest markets globally for ethanol as a fuel and this collaboration with Copersucar enables us to extend and expand our existing value chain to meet its growing demand.”

BP Biofuels expects the partnership with Copersucar to allow it to significantly expand its commercial presence in the country.

Copersucar president Paulo Roberto de Souza said: “The new joint venture will optimize ethanol logistics, with competitiveness gains and more flexibility in the way we serve the market.”

The joint venture deal is subject to the necessary approvals of relevant supervisory bodies.

Commissioned in 2014, the Paulínia terminal features ten tanks with a total storage capacity of 180 million liters of ethanol. It has capacity to move around 2.3 billion liters per year.