Brazil's ethanol firms team up to build pipeline

SAO PAULO, March 19 (Reuters) - Brazil's largest sugar and ethanol group, Cosan (CSAN3.SA: Quote, Profile, Research, Stock Buzz)(CZZ.N: Quote, Profile, Research, Stock Buzz), said late on Tuesday it has set up a joint company with Brazilian partners Copersucar and Crystalsev to build and operate an ethanol pipeline.

The capital of the new company, which totals 60 million reais ($35.4 million), will be split equally between the three shareholders, but new partners are welcome, Cosan said in a statement.

"It's a shareholders' intention to open this opportunity to other ethanol producers in (Brazil's) center-south and to other interested associates," Cosan said.

The pipeline is expected be built between Paulinia, in Sao Paulo state, and the coast, with ramifications to Conchas and Ribeirao Preto, in the same state.

The new company, named Uniduto Logistica S.A., will be in charge of technical and viability studies of the project and of obtaining its environmental clearance. Then it will work on the investment plan to implement the pipeline and build it.

Each shareholder will be able to transport an amount of ethanol equivalent of its stake in the company via the pipeline. They will also have priority over future clients to use the pipeline.

The announcement comes a month after Petrobras (PETR4.SA: Quote, Profile, Research, Stock Buzz) (PBR.N: Quote, Profile, Research, Stock Buzz) approved the creation of a tripartite company with Japanese trading house Mitsui (8031.T: Quote, Profile, Research, Stock Buzz) and Brazilian Camargo Correa S.A. to undertake basic phases for another ethanol pipeline to be built between Goias state and Paulinia.

The pipelines aim to improve efficiency and reduce companies' costs to transport ethanol for export from Brazil's countryside to ports.

Brazilian producers believe exports will grow in coming years as more countries adopt the sugar cane-based biofuel as an alternative to fossil fuel.

$1 = 1.694 reais (Reporting by Inae Riveras, editing by Matthew Lewis)