BUSINESS
LATIN AMERICA ON THE REBOUND Petrochemical projects are becoming a reality, and the region is considering more
L
ATIN AMERICA MAY NOT BE T H E
most prolific region in the world for t h e construction of new petrochemical complexes—that title would easily go to the hydrocarbon-rich Middle East. But Latin America's enthusiasm for such projects is without equal. The region has recently seen written commitments for important petrochemical complexes long talked about in Mexico and Venezuela. And many of the 700 delegates at the Asociacion Petroquimica y Quimica Latinoamericana (APLA) annual meeting, held earlier this month in Buenos Aires, wondered if these commitments signal a new atmosphere more favorable to big projects than in the past. Rafael A. Bielsa, Argentina's minister of foreign affairs, opened the meeting with a talk lauding Argentina's economic turnaround. After a four-year recession, the country experienced 8.7% growth in gross domestic product in 2003 and is projected to rack up 8% growth again this year. Bielsa stressed integration among Latin American countries and boasted that, under the leadership of President Nestor C. Kirchner, Argentina is improving economic
ties with its neighbors. "The Kirchner government perceives regional integration as an advantage in the global marketplace," he said. Such a strategy, he added, has benefits for Argentina's petrochemical industry such as improving natural gas networks between Argentina and Bolivia to help alleviate Argentina's gas shortage. But for the most part, the focus of the conference was on petrochemical projects. Arturo Garcia, director of the Phoenix Project at Mexican state oil company Pemex, detailed that ethylene complex, which received definitive commitments last month from partners Nova Chemicals and the private Mexican firms Grupo Idesa and Indelpro. Garcia said that, after many years of trying to reform the Mexican chemical industry through HONORED GUEST Argentinean Foreign failed privatization plans and pro- Affairs Minister Bielsa opened the conference posed projects that have gone in Buenos Aires. nowhere, the joint venture, in which Pemex will have at most a 4 9 % toluene, and xylene, as well as 250,000 metric tons of ethylene and 400,000 metstake, is "a turning point for the industry" ric tons of propylene. Downstream prodThe project will cost $1.9 billion and ucts, Garcia said, could include styrene. will have annual capacity for 1.2 million
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metric tons of ethylene and 600,000 metric tons of propylene plus derivative polypropylene and polyethylene units. Pemex and the partners have details such as feedstock costs to work out before final agreements are inked next spring. In addition, Garcia told the APLA audience, Pemex is "analyzing whether it makes sense to produce other ethylene and propylene derivatives to produce the largest number ofproducts in which Mexico has a deficit." Pemex plans a second phase of the Phoenix Project to produce aromatics. The unit, for which the company hopes to find partners by the end of 2006, would have about 8 0 0 , 0 0 0 metric tons of annual capacity for aromatics such as benzene,
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In Brazil, the Rio Polimeros ethylene and polyethylene project among Petrobras, Unipar, Suzano, and a national development bank is 90% complete. The complex was supposed to be finished this year, but it has been delayed until about April 2005, industry sources say because ofa three-month construction workers' strike. Longer term, Paulo R. Costa, director of supply for Brazilian national oil company Petrobras, said his company is focusing on a study of an ethylene cracker on the Bolivian border that would use ethane from Bolivia. The project, he said, would cost about $1.4 billion and produce 525,000 metric tons of ethylene per year. Argentina, in recent years, has seen the completion of a cracker at the PBB Polisur polyethylene joint venture between Dow Chemical and Repsol YPF. The country may have enough feedstock for new petrochemical capacity according to Carlos Octtinger, president of the raw material commission at the Argentine Petrochemical Institute. Around the country he said, some 1.4 million metric tons of ethylene and 573,000 metric tons ofpropylene could be made from available natural gas liquids.
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