Petroleo Brasileiro SA (PBR), or Petrobras, Brazil's state-run oil firm, plans to start building an ethanol-only pipeline from central Brazil to the coast in 2007, Chief Executive Sergio Gabrielli said yesterday.

"The pipeline will serve mainly to transport ethanol for export to Japan," Gabrielli said.  The pipelines would link ethanol producing areas in Brazil's central state of Goias via main producing areas in Sao Paulo state to the port of Sao Sebastiao on the Atlantic Ocean.

Last month, Petrobras, Japanese company Mitsui & Co., and the Brazilian builder Camargo Correa had signed a memorandum of understanding to study the construction of an ethanol pipeline network in Brazil.  For the past few years, Petrobras has been in talks with Japan, a major oil importer, as well as countries from Nigeria to Venezuela about long-term ethanol export contracts, and Gabrielli said that Petrobras has also started discussions about possible ethanol projects with Colombia.

Petrobras this year sees ethanol exports of 850 million liters, Gabrielli told Dow Jones Newswires.