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BioEnergy, Lukoil develops Pennsylvania ethanol distillery

A unit of OAO Lukoil, Russia's biggest oil company, and privately held BioEnergy International LLC said they plan to build an ethanol plant in Pennsylvania to supply growing demand for the gasoline additive in the Northeast. The plant, which will be Pennsylvania's first ethanol distillery, is expected to be completed by the Q3 of 2008 and produce about 108 million gallons of the grain-based fuel a year, the companies said in a joint statement yesterday. BioEnergy International, based in Norwell, Massachusetts, will own and operate the plant. Lukoil Americas Corp., based in East Meadow, New York, has agreed to buy all the plant's production for blending into gasoline it sells at more than 2,000 company-branded and Getty Petroleum fuel outlets in 13 Northeast states. The company is part of Moscow-based OAO Lukoil. Ethanol companies are building new plants or expanding existing ones in anticipation of greater demand after US refiners earlier this year shifted to the additive as the primary blending component in gasoline. Most ethanol in the US is made from corn grown in the Midwest, far from major gasoline markets in the Northeast and South. „We're looking for locations closer to our end-users” for new ethanol plants, Samuel McConnell, BioEnergy International's vice president of development, said in a phone interview. The BioEnergy plant will be built in Clearfield County, in the west central part of Pennsylvania, at an estimated cost of $180 million, McConnell said. It will initially process corn shipped by rail from the Midwest, before later shifting to organic waste, the statement said. (Bloomberg)