Bolivia to pipe more gas to Argentina - report

06 July 2007 00:59  [Source: ICIS news]

HOUSTON (ICIS news)--Brazil has asked Bolivia to redirect 1m cubic meters per day of natural gas to Argentina to ease tight supply in that country, according to a report by Reuters on Thursday.

An unusually cold winter in Argentina has led to higher demand for ethane as a heating fuel, which has led to a shortage in the production of petrochemical feedstock, industry sources said.

However, between Bolivia’s commitments to Brazil and Argentina and its own domestic demand, there has been little Bolivia could do to increase the supply to Argentina.

According to Reuters, the gas and some 350 megawatts of electricity from Brazil aimed at reducing gas demand will be sent to Argentina from this weekend through the end of August. The unconfirmed report cited a government source.

On 30 June, Argentina’s largest producer Mega cut off the supply temporarily at the request of the government.

“Dow’s site production was affected since Mega supplies 60% of the total ethane demand. Production was resumed [on Tuesday] at lower-than-expected production rates, but allowing Dow to run the crackers trouble free,” according to an industry source close to the situation at Dow in Argentina.

Dow has two ethane suppliers but both were affected by the gas shortage, the industry source said.

Argentina’s polyvinyl chloride (PVC) producers have also begun to fret about the gas supply situation, saying that if the shortage continues it would begin to impact PVC within 60-90 days, sources said.

In another such case, Agrium’s Profertil nitrogen joint venture plant in Argentina was forced to stop production, the Canadian fertilizer major said on Thursday.

Even in Chile, which imports gas from Argentina, methanol producer Methanex continues to run only one unit, but could restart a second unit in Chile in the next two weeks, as reported by ICIS news.

By: John Waggoner
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