Nippon Oil builds Japan's first ETBE-making unit

TOKYO, Oct 26 (Reuters) - Japan's top refiner, Nippon Oil Corp (5001.T), said on Monday it has finished building the nation's first facility for making ethanol-based gasoline additive ethyl tertiary butyl ether (ETBE). The petroleum industry plans to market ETBE-blend gasoline, which burns more cleanly than regular gasoline, nationwide from 2010 and have biofuel blends accounting for up to 20 percent of the country's annual gasoline demand of roughly 1 million barrels per day.

The industry aims to blend 840,000 kilolitres a year of ETBE, containing 360,000 kl of bioethanol.

Japanese oil companies started selling ETBE-blended gasoline at some gasoline stations in the Tokyo area in 2007.

The unit at Nippon Oil's Negishi refinery in Yokohama, which is capable of producing 100,000 kilolitres (1,700 barrels per day) of ETBE a year, will begin commercial operations from the end of November after trial runs, the company said in a statement. The facility will process mostly domestically produced bioethanol bought from Hokkaido in northern Japan. (Reporting by Osamu Tsukimori; Editing by Hugh Lawson)