UPDATE 1-Demand for U.S. ethanol plants "dead" until Q2 '09

(Adds comments from interview, detail, updates shares)

LONDON, March 26 (Reuters) - The global banking crisis and record feedstock prices mean demand for new U.S. ethanol refineries will be "dead" for at least a year, the outgoing head of refinery engineer Bateman Litwin BNLN.L told Reuters.

"We had a roadshow three weeks ago with the CEO of Delta-T; we met all the top 15 banks and institutions financing the ethanol business and the view of everybody is 2008 is probably dead, mainly because of the general market but also because of the ethanol market," outgoing Chief Executive Shuki Raz told Reuters on Wednesday by phone.

Banks are too cautious to fund the building of new ethanol refineries because of high corn prices, pushing down the margins for ethanol processing firms, and the credit crisis, he said.

Bateman bought Virginia-based ethanol refinery plant designer and biofuel technology firm Delta-T last year.

"Everyone believes in the second quarter of 2009 we will see the ethanol market coming back to life and we want to be ready for it," said Raz, whose departure was announced on Wednesday.

Raz believes it will be April, May or June of 2009 before the market recovers. Ethanol is blended with gasoline for use as transport fuel.

Shares in Dutch-based Bateman fell 20 percent in London by 1027 GMT after it warned Delta-T would struggle in its full financial year to June, 2008, as it posted half-year results.

Bateman will concentrate on finishing contracts signed by Delta-T before it was bought by October or November.

Until the market recovers it will concentrate on marketing outside the U.S., particularly China, Australia and Italy.

It is in negotiation on three Australian projects, worth $6 million each, not announced in the results. The potential plant builder is trying to raise finance for the projects, Raz said.

Bateman also hopes to announce a contract in Italy, Raz said, but talks are at an earlier stage.

Raz, who said the firm had been searching for his replacement for the last 15 months, will stay on as a consultant to Bateman.

He has been replaced by David Lamont, an engineer previously at oil services firm Vetco International who will focus on operational issues such as integrating processes and databases for Bateman, Raz said.

(Reporting by Chris Wills, editing by Elizabeth Fullerton)

(chris.wills@reuters.com; 0044 (0)20 7542 5331; Reuters Messaging: chris.wills.reuters.com@reuters.net))