Vietnam says to have five biofuel plants by 2010

HANOI (Reuters) - Vietnam plans to complete five biofuel plants by 2010 to meet a tiny part of domestic demand for petrol and diesel, the government said.

The plants will churn out a combined 100,000 tonnes of ethanol 5 percent gasoline (E5) and 50,000 tonnes of biodiesel 5 percent (B5) per year to meet 0.4 percent of national demand, Deputy Minister of Science and Technology Nguyen Van Lang said in a report.

The plants will use cassava and sugarcane as feedstock.

Lang said the government would consider importing biofuel as part of efforts to introduce the products to consumers.

The first plant in the northern province of Phu Tho, being built by Petrovietnam's oil trading arm PV Oil at a cost of $85 million, will start operation next year with an annual capacity of 100 million liters of ethanol, the report said.

Other plants include the 40-million-liter-per-year ethanol factory by Saigon Biofuel Co and the Dung Quat ethanol plant by PV Oil.

Last month PV Oil began selling ethanol to motorists on a trial basis in Hanoi, but the sales were suspended shortly after as the government said it needed to establish fuel standard specifications before ethanol goes to consumers.

Last year Hanoi endorsed a project to produce 250,000 tonnes of ethanol per year by 2015 to meet 1 percent of the country's petrol demand as it sought to cope with high energy costs.

(Reporting by Nguyen Nhat Lam; Editing by Michael Urquhart)