UPDATE 2-BP enters Brazil ethanol sector, buys JV stake

(Recasts, adds quotes, specifies investment between partners)

By Gustavo Nicoletta

SAO PAULO, April 24 (Reuters) - BP Plc (BP.L) entered Brazil's booming ethanol sector on Thursday by taking a 50 percent stake in a big biofuels project and announcing ambitious investment in the sugar cane-based fuel.

It agreed to pay 100 million reais ($60 million) for the stake in Tropical Bioenergia SA -- a joint venture between Brazilian sugar and ethanol producer Santelisa Vale and Maeda, which grows cotton and soy and makes plant-based oils.

The British energy company, better known as a world oil major, said that it and its partners in Tropical will invest 1.66 billion reais (US$1 billion) in two new biofuels plants in Latin America's largest country.

Maeda and Santelisa Vale would each now hold 25 percent in the firm, providing the same share of the overall investment.

"This investment is the biggest ever made by an international company in the Brazilian ethanol industry," BP biofuels division chief Phil New told a news conference.

"It represents a significant part in the strategy of BP, which believes in sustainable raw materials that do not have an impact on food supplies," he added, referring to a heated global debate regarding the influence of biofuels on prices and general availability of food.

Brazil is actively defending its ethanol and biodiesel programs from critics questioning the environmental and social benefits of biofuels. The country says it has enough land to plant crops for energy-efficient fuels like ethanol without compromising crops destined for food.

The BP deal comes at a time when Brazil's ethanol consumption is starting to exceed gasoline usage as a result of a huge new fleet of flex-fuel cars that can run on gasoline or sugar cane-based ethanol. Brazil is the world's biggest ethanol exporter.

Ethanol is cheaper than gasoline even though Brazil's gasoline prices have been frozen since 2005 and consumers have not felt most of the effect of the global oil price rally.

Tropical is building an ethanol plant in the central Goias state with a capacity to produce 435 million liters (115 million gallons) a year and plans a second ethanol refinery.

"Tropical is well positioned to become Brazil's leading sustainable supplier of ethanol," Tropical Bioenergia said on its website. ($1=1.66 reais) (Writing by Andrei Khalip; Editing by John Picinich)