INTERNATIONAL
The Caribbean: Healthy Climate for Chemicals Refineries and natural gas deposits provide large source of raw materials for petrochemicals
RAW MATERIALS. Texaco's Trinidad refinery receives about 8 0 % of its crude from Venezuela
On islands dotting the Caribbean Sea, many of them so small that local chemical markets are close to zero, U.S. companies are building petrochemical plants. An unusual situation perhaps, but the Caribbean is an unusual area. Fragmented geographically, the region is highly diverse in politics, and its economics are complex. A basic reason for building petrochemical plants in the Caribbean is availability of raw materials—petroleum and natural gas. They come chiefly from Venezuela and to a lesser extent from Trinidad and Colombia. Large refineries to process Venezuelan and other crude were built many years ago in Venezuela and on Caribbean islands—Aruba, Curacao, and Trinidad. Today, these refineries and local natural gas deposits are important sources of feedstocks for petrochemical plants. Nearly all the world's major trading blocs are represented in the Caribbean 68
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SHIPPING. Dry cargo is unloaded in Puerto Rico. The Caribbean Islands have good harbors for shipment of goods to world markets
area. The Netherlands Antilles will soon become part of the European Economic Community. The French West Indies is already part of EEC. Trinidad and Tobago, Jamaica, and other former British colonies are part of the British Commonwealth. Puerto Rico's commonwealth status ties it to the U.S., with some trading privileges that U.S. mainland areas don't have. On the mainland of South America, Colombia is a member of the Latin American Free Trade Association. Availability of raw materials and membership or close association with the world's major trading blocs aren't the only factors influencing the development of a Caribbean petrochemical industry. Some of the other advantages include good harbor facilities for shipment of products into world markets, available labor, tax concessions, and other official encouragements for industry. The major disadvantages to build-
ing in the Caribbean are the absence, or near absence, of local markets and the usual difficulties of building plants in an area that is not highly industrialized. Cheap labor may be abundant, but there is a shortage of skilled labor. The distance from suppliers of materials and equipment deprives a company of some of the service it might get in a large industrial area. Netherlands Antilles. Toward the end of February, Aruba Chemical Industries, N.V., made its first shipment of complex fertilizer. Antilles Chemical Co. began operating its ammonia plant on Aruba last summer. Aruba Chemical and Antilles Chemical are both wholly owned by Standard Oil Co. (N.J.). Antilles Chemical's plant has a rated capacity of 100,000 tons per year of ammonia. Plans call for two thirds of this ammonia to go to Aruba Chemical. Aruba will convert the ammonia into urea and complex fertilizers. Its rated capacity is 130,000 tons a year
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ri of complex fertilizer and 80,000 tons a year of urea. Originally, Jersey Standard owned 50% of Aruba Chemical. The other half was held by International Development and Investment Co., Ltd., partly owned by the German company, Phoenix Rheinrohr (a supplier, among other things, of special steel piping used in ammonia plants), and C&I/Girdler International, which did the engineering work on the plants. Jersey Standard acquired 100% ownership of Aruba Chemical in February (C&EN, Feb. 10, page 19). Refinery gases from Jersey Standard's Lago refinery on Aruba are the raw materials for Antilles Chemical Co's ammonia plant. The Lago refinery started operating in 1929. It's one of the largest refineries in the world, with a capacity of about 500,000 barrels per day. The refinery operates on an average of about 440,000 barrels of crude per day. Its 4000 employees constitute about 24% of the labor force on Aruba. The governments of Aruba, Bonaire, and Curacao, the three largest islands of the Netherlands Antilles,
are trying to attract more chemical industry. (The other three Dutch islands, the Netherlands Windwards, have a total area of less than 30 square miles and a population of fewer than 5000). The Netherlands Antilles has a political status under the Dutch crown that is on a par with that of the Kingdom of the Netherlands. The crown retains control only over foreign policy and defense. The islands are stable politically and they have the highest standard of living in the Caribbean. Aruba's Department of Economic Development is trying to drum up interest for a chlorine-caustic soda plant, but so far it has not obtained either government or private funds for the plant's construction. Salt could be made from concentrated brine from the island's sea water distillation plant. At present, the brine is returned to the sea. Aruba and the other two islands in the group must obtain their water by distillation. Aruba's distillation plant is fueled by Bunker C fuel oil from the refinery. Operated in conjunction with the electric power plant, it pro-
duces 2.7 million gallons of fresh water per day. The plant will be enlarged by adding a 900,000-gallon multiple flash unit, similar to the one that the U.S. will move from San Diego, Calif., to supply the U.S. naval base at Guantanamo, Cuba. Brine from the water plant could supply about 250 tons a day of salt. That amount of salt could be converted to about 100 tons a day each of caustic soda and chlorine. Caustic could be sold to refineries in the Caribbean and the chlorine would be one more basic material available for chemical development. Antilles Chemical Co. currently imports phosphate from Florida for its complex fertilizer plant. Phosphate was once mined in Aruba, but reserves of the high-grade material were exhausted. The island's government has had studies made which show that it is technically feasible to upgrade the existing rock by means of a Japanese-Israeli solvent extraction process. The process would remove most of the unwanted aluminum and iron. In combination with acidulation with hydrochloric acid, such a MAY 11, 196 4 C & E N
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Venezuela's ambitious petrochemical program has not progressed according to schedule
process might be used to make phosphoric acid for complex fertilizer. In Curacao, a British company, Curacao Mining Co., mines a phosphate rock which is too good for fertilizer use. The phosphate has a low fluorine content and sells at a premium price for use in animal feeds. Exports of the material in 1961 were 144,000 long tons—85% of which went to the U.S. Shell Curacao, Inc., a member of the Royal Dutch/Shell Group, has a large (260,000 barrel-per-day throughput) refinery on Curacao. However, so far there has been no petrochemical development on the island. International Salt is currently studying Bonaire as a possible site for a salt plant. The Netherlands Antilles has applied for membership in the European Economic Community. EEC's European Parliament has approved its membership, but it must be ratified by the member states. So far, only Luxembourg and Italy have not done so and indications are that they will. The Netherlands Antilles is to be admitted with the restriction that petroleum products from the islands may not enter ECM duty free. The restriction does not apply to petrochemicals. Puerto Rico. The latest addition to Puerto Rico's petrochemical industry is Commonwealth Oil Refining's $23 million plant at Penuelas, which produces benzene, toluene, and xylenes. Feed material for the plant is a stream from Commonwealth's 115,000 barrelper-day refinery at Guayanilla Bay on the southern coast of the island. At Ponce, a few miles from Penuelas, Union Carbide is expanding its petrochemical plant by adding a unit to make 2-ethyl hexanol. The plant, which started production in 1959, makes 175,000 pounds per year of mono-, di-, and Methylene glycol. Part of the plant's raw material, ethylene, comes from Commonwealth Oil in the form of refinery gases. Carbide 70
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extracts ethylene from the gases and returns the remaining gases to Commonwealth. The rest of the plant's ethylene comes from Carbide's own cracking unit, which uses light naphtha from Venezuela. Union Carbide, located in a U.S. foreign trade zone, imports naphtha from Venezuela into Puerto Rico duty free. This privilege is granted because of the high percentage of product exported. So far, Carbide has not gone ahead with its plans to build a large polyethylene plant on the island. At Guanica, not far from Carbide's plant, W. R. Grace operates Caribe Nitrogen, whose ownership Grace shares with local interests. Caribe Nitrogen's nitrogen fertilizer plant was built by Gonzales Chemical Industries, which was later purchased by Grace. Puerto Rico Chemical Co. plans to build a 48 million pound-per-year phthalic anhydride plant in Puerto Rico. The plant will be based on o-xylene and will probably be built by the German engineering firm, Chemiebau. Trinidad. Federation Chemicals, Ltd., of which W. R. Grace is the principal stockholder, recently expanded its ammonia plant in Trinidad
from 35,000 tons to 235,000 tons a year. Grace is shipping the ammonia by tanker to Carolina Nitrogen (75% owned by Grace) in Wilmington, N.C., and to its ammonia receiving station in Tampa, Fla. Grace also owns a small share of Nitram Chemicals, a fertilizer producer in Tampa. Nitram and Carolina Nitrogen will convert the ammonia into ammonium nitrate and solutions for use as fertilizers in their local markets. Some of the ammonia will also be sold to other companies. Texaco's Trinidad refinery, which has been in operation for many years, receives about 80% of its crude from Venezuela by tanker. The remaining 20% comes from wells in Trinidad, and from neighboring offshore wells. Texaco sells gas to Federation Chemicals, to a local cement factory, and to the local public utility company. Texaco makes benzene, toluene, xylene, cyclohexane, diisobutylene, propylene tetramer, nonene, naphthenic acid, and sulfur at its Trinidad refinery. The company is considering the possibility of making other products, too. Texaco's refinery is by far the largest on Trinidad. Capacity is about 300,000 barrels per day. Shell and
AMMONIA. Federation Chemicals can produce 235,000 tons a year of ammonia at its plant at Point Lisas, Trinidad. The ammonia will be shipped in special tankers to the U.S. and other parts of the world for use in fertilizers
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There Is Practically No Market for Petrochemicals in the Caribbean PRODUCE. Open-air produce markets line the streets of Trinidad and Tobago. Unskilled labor and the absence of local markets are major disadvantages to building plants in the Caribbean
British Petroleum also have refineries there. Venezuela. Venezuela's ambitious petrochemical program, started by the government-owned Instituto Venezuelano de Petroquimica in 1955, has not progressed according to schedule. However, the complex at Moron does have facilities in operation for making nitrogenous and other fertilizers, chlorine and caustic soda, and some other heavy chemicals. Within the next two years, the organization intends to build an explosives plant, expand its fertilizer plant, and build a 200,000 barrel-per-day oil refinery. Later, it plans to build units to make benzene, toluene, xylene, styrene, butadiene, styrene-butadiene rubber, propylene tetramer, dodecylbenzene, polystyrene, and polyvinyl chloride. The existing plants at Moron can produce 80,000 tons a year of ammonia, 40,000 tons of phosphoric acid, and 80,000 tons of sulfuric acid. These are used in plants which can produce 60,000 tons of ammonium nitrate, 96,000 tons of ammonium sulfate, 20,000 tons of urea, 99,000 of superphosphate, 40,000 of triple superphosphate, and 105,000 of complex fertilizers. 72
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The Venezuelan government's policy of allowing only its own organization to develop petrochemical production in Venezuela was started under the Jimenez dictatorship. Since the overthrow of Jimenez in early 1958, the government has not issued a firm decision on whether this policy will be continued. Venezuela, with a population of 6.6 million and a high per capita income, has a much larger chemical market than that of the islands in the Caribbean. For example, Venezuela's population is now large enough to support a synthetic fiber industry to supply the needs of the local textile industry. The market in Venezuela will only support a relatively small chemical plant compared to plants in the U.S. To enable a small plant to compete with larger plants overseas, the government places tariffs on imported chemical products which are also made locally. Colombia. Venezuela has not yet joined the Latin American Free Trade Association. But Colombia, which has a larger population and a lower per capita income than Venezuela, has joined.
Like Venezuela, Colombia supports a fair sized chemical industry. On its Caribbean coast at Cartagena, Jersey Standard has built an ammonia plant (operated by Amoniaco del Caribe) and a plant for making urea and complex fertilizer (operated by Abonos Colombianos). Capacity of the ammonia plant is 10,000 tons per year. At the same site, there is a 60,000 tonper-year nitric acid plant. Capacity of the complex fertilizer plant is 130,000 tons per year, and of the urea plant, 80,000 tons per year. Economics. Aside from fertilizers for sugar cane and other tropical export crops, there is practically no market for petrochemicals in the Caribbean area. The two small ammonia plants built chiefly for local markets were not great economic successes. The Caribe Nitrogen plant in Puerto Rico has had difficulty in competing with imported fertilizers. Nor was the small original plant of Federation Chemicals to serve a local market in Trinidad a great money maker. The recent sevenfold expansion of Federation Chemicals' ammonia plant was made to serve the U.S. and European markets, and this puts it into an entirely different category. The thought of W. R. Grace, through its ownership in Federation Chemicals, making ammonia in Trinidad has caused a certain amount of consternation in the U.S. nitrogen fertilizer industry. The gas used by the Trinidad plant is much cheaper than any available in the U.S. The plant is in an area where there are very low taxes. The ammonia is brought into U.S. ports duty free. Natural gas in the U.S. Gulf Coast area sells for not much less than 20 cents per thousand cubic feet. By the time it is piped to Florida, or the South Atlantic Coast, it costs considerably more. Grace won't say what it pays for gas in Trinidad, but some gas is sold there for less than 10 cents per thousand cubic feet. Against the advantage of low-priced raw material must be set the cost of shipping the finished product to the
U.S. Grace expects to bring the shipping costs down by using special ammonia tankers. The company plans to use two charter vessels built especially for carrying ammonia. One tanker will be ready next month and the other should be completed this fall. They will carry liquid ammonia at atmospheric pressure and —28° F . Each will be able to carry 9000 tons of ammonia and about 300 tons of dry cargo. The ammonia will be unloaded at Tampa, Fla., and Wilmington, N.C.; the tankers will have to deadhead back to Trinidad. Although Jersey Standard has sold some of the ammonia from its Caribbean plants in the U.S., its ultimate market is Latin America. The United Nations and other groups are trying to increase the use of fertilizer there, and the potential market is great. Most of the aromatics made in the Caribbean are shipped to Europe. Texaco sells most of its Trinidad petrochemicals there. A Shell company, Asiatic Petroleum, will sell Commonwealth Oil's aromatics chiefly in Europe. Future. In Caribbean areas other than Puerto Rico, Trinidad, the Netherlands Antilles, Venezuela, and Colombia, there is little petrochemical development so far. Jersey Standard is building a refinery on Jamaica, but it will aim at supplying the local market and won't be large enough to be a very attractive source of petrochemical raw materials. The French islands have not yet built any petrochemical facilities. Haiti and the Dominican Republic have very small local markets, and are generally considered too unstable politically to offer any special advantages to attract foreign investment. Probably the biggest development of the chemical industry in the Caribbean will be in the areas where plants have already been established. At least two petroleum companies are now considering plans to build new petrochemical complexes in Puerto Rico. Phillips Petroleum, for example, has applied for permission to import 50,000 barrels per day of selected hydrocarbon fractions. There is a possibility that the existing petrochemical plants on Trinidad and in the Netherlands Antilles may attract a secondary chemical industry as well. However, any major plants will probably be built to supply export markets, not the Caribbean market.
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