Petrobras plans 10 more biodiesel plants

RIO DE JANEIRO, Dec 20 (Reuters) - Brazil's state oil company, Petrobras (PETR4.SA: Quote, Profile, Research, Stock Buzz)(PBR.N: Quote, Profile, Research, Stock Buzz), plans to build 10 new biodiesel plants through 2012 in addition to three it is going to launch next year to meet Brazil's new diesel blending requirements.

Downstream director Paulo Roberto Costa told reporters late on Wednesday each plant would cost about 70 million reais ($39 million) and jointly the 13 biodiesel production units would churn out annually 850 million liters five years from now, when Petrobras wants to become the leading producer of the fuel.

The three plants to be opened in March will produce 180 million liters per year of the plant-based fuel.

Starting on Jan. 1, a 2 percent blend of biodiesel, known as B2, in mineral diesel fuel becomes compulsory in Latin America's largest country.

Brazil's ANP oil and fuel market regulator has held a number of auctions to provide a sufficient amount of fuel for the shift, and Costa expected no supply problems.

"The production capacity in Brazil today is 1.8 billion liters and the expected consumption is 850 million liters," he said, adding that two more auctions were planned for next year, with 380 million liters to be sold in the first one. (Reporting by Rodrigo Gaier, translated by Andrei Khalip, editing by Matthew Lewis)