BUSINESS have capacity for 520,000 metric tons of ethylene and 540,000 metric tons ofpolyethylene per year. Its 75,000 metric tons of propylene output will supply a nearby Polibrasil polypropylene plant. Roberto Villa, managing director of Rio Polimeros, admitted that the price for the RAZILS PRESIDENT, LUIZ INACIO veloping the tantalizing new discovery of ethane feedstock is pegged to "international Lula da Silva, was scheduled to the Santos Basin, a huge oil and gasfieldoff levels" said by other sources to be the U.S. speak at the Asociacion Petro- the coast of the state of Rio de Janeiro that Gulf Coast price, which has lost internaqiiimicay Quimica Latinoamer- was profiled at the conference by Wagner tional competitiveness in the two years icana (APLA) annual meeting Victer, energy secretary for the state of Rio since the contracts for the complex were on Nov 9 in Rio deJaneiro. Though it may de Janeiro. He said thefindcould produce inked. However, Villa said the plant will be seem unusual for a president of a country as much as 300,000 barrels per day ofcrude competitive with the other crackers in as large as Brazil to attend such an event, oil and make the country self-sufficient in Brazil, which are based on naphtha. da Silva has been reaching out to industri- natural gas. alists to calm fears that his left-wing past Victer raised the specter that means trouble for them. Petrobras would develop petroIn the end, he was hung up on a visit to chemical plants based on Santos Africa and didn't show However, whatev- Basin gas. "Petrobras will also invest er disappointment the attendees felt was in the petrochemicals area," he said. overwhelmed by their exuberance with the "I hope it isn't only interested in buyBrazilian petrochemical industry's recent ing new companies but also in ingood performance and their optimism for vesting and creating new jobs." the future. "Good times are coming back Attendees were interested in the again," said Eduardo E. Gouvea Vieira, pres- discovery but they pointed out that ident ofAPLA and head of Brazil's Ipiran- its ethane content is so far unknown. ga Quimica. 'This industry has been suf- Moreover, they cautioned that even fering for many years. We can soon reap the ifit can support an ethylene complex, benefits of all the sacrifices that we have one shouldn't be built right away be- GOOD TIMES Gouvea addresses attendees been making.,, cause Brazil will soon have enough about the turnaround in Brazil. Attendees shared the sentiment. "We capacity to last a long time. Villa noted that the complex was dedon't know how this happened. We don't That's because Brazil's fourth ethylene know how long it will last. But we are en- cracker, which meeting attendees toured, is signed so that a modest investment could joying it," said Pedro W)ngtschowski, man- being built by Rio Polimeros, a joint venture expand ethylene capacity to 650,000 metaging director of Oxiteno, a Brazilian mak- involving the Brazilian industrial groups ric tons. However, when the project was er of ethylene oxide derivatives. Suzano and Unipar—each with a one-third conceived, no planning was made to acMany at the conference wondered what share—along with Petrobras (16.7%) and commodate the type of expansion that would be necessary to take full advantage of Brazilian state oil company Petrobras is up the development bank BNDES (16.7%). to. Earlier this year, Petrobras bought ArThe $1 billion complex in Duque de the potential Santos Basin gas. 'At the time, gentinian energy company Perez Com- Caxias, in the state of Rio de Janeiro, is we didn't have the good news about the Sanpanc, a purchase that included polystyrene scheduled to be completed late next year, tos Basin," he said. And Rio Polimeros could be part of a maker Innova and polyolefins producer with commercial start-up in early 2005. Petroquimica Cuyo. Petrobras ethane from the nearby Cam- bigger whole. Negotiations are underway In addition, Petrobras is charged with de- pos Basin will feed the facility, which will to integrate it with Petroquimica Unino (PQU), a petrochemical maker in which Unipar 07%) and Petrobras (17%) are the PETROBRAS UPDATE largest stakeholders. Regardless ofthe outcome ofthose talks, PQU is planning to expand its ethylene cracker near Sao Paulo by 40% to 700,000 t the Brazil Day 2003 meeting in New York City last week, Jose Sergio Gabrielli de metric tons peryear.The company is in neAzevedo, chief financial officer of Petrobras, pledged his company would soon clarigotiations with Petrobras to obtain refinfy its future role in Brazil's petrochemical industry by announcing a strategic plan ery off-gases. Some $160 million in upfor the industry in February or March of next year. grades would turn that gas into an ethylene Azevedo acknowledged that having small stakes in Brazil's three ethylene crackers— stream by mid-2007, which would feed a Braskem, PQU, and Copesul—as well as in numerous other petrochemical plants, presnew Unipar polyethylene plant. ents a problem for the company. "It is impossible for us to keep small partnerships with With plans like these under way the indifferent companies with different strategies," he said. dustry could be entering another era, much The company wants to optimize its petrochemical portfolio, Azevedo said, particularly in like the inception of the petrochemical inlight of the chemical assets it bought from Perez Companc. He also promised that the company doesn't want to create a state monopoly in petrochemicals like it has in petroledustry in Brazil 30 years ago, in which Petroum. "We don't have a clear way to change the situation for Petrobras," he said, but the bras has a hand in almost every petrochemcompany will soon decide how it will do just that. ical project in the country—ALEX TULL0
ORDER AND PROGRESS
Petrochemical meeting in Rio de Janeiro is upb eat as state oil company involvement grows
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Oil Company Framing Strategy
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