Braskem puts Bolivia polyolefins project on ice

28 April 2007 02:06  [Source: ICIS news]

SAO PAULO (ICIS news)--Brazil’s Braskem has suspended plans of building an ethylene and polyethylene (PE) facility in Bolivia, citing problematic conditions, company officials said on Friday.

Bolivia currently cannot guarantee “good investment conditions” and enough gas supplies to run the business, Braskem’s president and chief executive Jose Carlos Grubisich said.

The company has had talks with Brazilian state oil company Petrobras and Bolivia's Yacimientos Petroliferos Fiscales Bolivianos (YPFB), but a partner has never been formally declared.

Bolivia represents a promising area for Braskem’s long term expansion strategy, Grubisich told ICIS news in March. South America, especially Venezuela and Brazil, are the first priorities though Grubisich said that Braskem would even consider expanding into the US or Europe if the opportunity presents itself.

The decision to back off from Bolivia did not relate to Braskem’s situation with its Ipiranga acquisition in southern Brazil, where anti-monopoly authorities have questioned the company’s market concentration, a company insider said on Friday.

Market talk has come and gone for several years in Brazil about the possibility of using natural gas from Bolivia to feed a petrochemical cracker near the border between the two countries, but the timing has remained elusive.

Some analysts have considered the project especially complicated ever since Bolivian President Evo Morales seized hydrocarbon production assets from Petrobras last year and created international tensions.

However, Grubisich said that Braskem’s experience partnering with state enterprise such as Petrobras and PDVSA of Venezuela would be valuable in carrying out any eventual investments involving Bolivia.

Braskem officials in February said the proposed facility could cost up to some $1.5bn (€1.1bn) and have a polyethylene capacity from 600,000-700,000 tonnes/year.

($1.00 =  €0.74)

By: Hellen Berger
+1 713 525 2653

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