Case Study
Evaluating entry into ethanol pipelines to expand biofuels operations
Expanding into biofuels, one of Latin America's largest multimodal logistics operators assessed its entry into ethanol pipelines, pointing to revenue potential of up to R$1.3 billion per year.
Client
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One of the largest multimodal logistics operators for oil, derivatives, natural gas, and biofuels in Latin America, with annual revenue exceeding R$ 14 billion and a wholly owned subsidiary of one of Brazil's largest energy groups.
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The company operates approximately 8,500 kilometers of oil and gas pipelines and approximately 50 terminals, both onshore and waterway, connecting production areas, refineries, and end markets across Brazil.
Challenges
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Expansion of the company's presence in the biofuels market, in line with its growth strategy in renewable energy.
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Assessment of entry into the ethanol pipeline segment, requiring a clear understanding of volume capture potential and logistics relevance.
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Uncertainties regarding supply dynamics (e.g.: expansion of corn ethanol) and intermodal competition in the asset's regional catchment area.
Our Approach
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The project applied a custom optimization model in AIMMS® to estimate the future ethanol throughput potential of the asset under evaluation.
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The modeling, built on parameters provided by the company, enabled simulation of national energy balance scenarios and assessment of supply-side shifts—including the expansion of corn ethanol—as well as intermodal competition in the asset's regional catchment area.
Results
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Depending on the scenario, potentially capturable volume may increase by approximately 80%, while revenue potential may grow by approximately 50%.
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The scenario with an optimal tariff structure reaches approximately R$ 800 million/year in revenue, with alternative scenarios reaching ~R$ 1.3 billion/year, underscoring the significance of the commercial strategy.