SAO PAULO (Dow Jones)--Three Brazilian states in the country's northeast signed a letter of agreement on Friday to begin studying a massive ethanol pipeline project, the Tocantins government said late Friday.
The agreement was signed between the Tocantins governor and vice governors of Piaui and Maranhao in New York City on Friday at a Cipriani Wall Street forum on sustainable development. The states agreed to study ways to build and finance the pipeline that would run through the three states up to the Itaqui Port in Maranhao.
The port would make it easier for the three states to export ethanol to the Caribbean or directly to the U.S., Brazil's leading market.
Tocantins, Maranhao and Piaiu are all very small sugarcane producers, but an eventual pipeline could increase sugarcane expansion in the region, located in the far-eastern corner of the Amazon biome.
Suzanna Barros, a press officer for Tocantins governor Marcelo Miranda, said in a phone interview from New York that the signed agreement stipulates the states' intention to move ahead with studies on the pipeline, "to get cost estimates and see how the states could finance it themselves and with partners," she said.
Brazil is the world's leading low-cost ethanol producer and No. 1 ethanol exporter.
Former U.S. president Bill Clinton said at the Sustainable Development Forum on Friday that Brazil's ethanol production was a step above corn ethanol in terms of environmental and production costs.
Source: Kenneth Rapoza, Dow Jones Newswires; 5511-3145-1488; kenneth.rapoza@dowjones.com