SAO PAULO, July 13 (Reuters) - Brazil’s Raizen, a joint venture between Royal Dutch Shell PLC and Brazilian energy company Cosan SA, is targeting a valuation of around 70 billion reais ($13.5 billion) in its initial public offering, three people with knowledge of the matter said on Tuesday. The valuation may range from 60 billion to 80 billion reais depending on demand, they added. The company, which owns gas stations and produces ethanol, has decided to reduce the offering to around $1 billion, or a little more than 5 billion reais, from more than $2 billion planned initially, the sources said. Raizen did not immediately respond to a request for comment. Raizen had planned initially to raise 12 billion reais in the IPO, which will be only primary. The issue size and share price range may be announced in a new prospectus that will be filed with Brazilian securities industry watchdog CVM as soon as this week, the sources added, asking for anonymity to disclose private discussions. In preliminary meetings with investors in a process known as pilot fishing, orders reached close to the full book of the offering. The IPO syndicate has 12 investment banks, including the units of Banco BTG Pactual SA, Citigroup, Bank of America, Credit Suisse Group AG, JPMorgan Chase & Co, Morgan Stanley, Banco Bradesco SA, Banco Santander Brasil, XP Investimentos, HSBC, Safra and Scotiabank. $1 = 5.1634 reais Reporting by Tatiana Bautzer; Editing by Richard Chang Our Standards: The Thomson Reuters Trust Principles.