Another natgas shortage chokes Argentina petchems

21 July 2009 00:01  [Source: ICIS news]

BUENOS AIRES (ICIS news)--Several producers in an Argentine petrochemical complex are contending with natural gas cutbacks, as the government rations supplies during the southern winter, an industry source said on Monday.

Already, Carboclor has had intermittent gas cuts, Nestor Ramirez, general manager.

“Even though the industry in general has not been working to its full extent - due to lower demand - and the winter season has not been very cold, the gas supply cutbacks continue to happen. This is a sign of the seriousness of the energy situation in Argentina,” Ramirez said.

“Replacing gas for fuel oil or gas oil can cost twice as much, and this is only an option for companies that use this product as an energy source, not for the ones who need it as a raw material,” Ramirez said.

Another company at the complex, Cabot, said it has restricted production due to the natural gas cutbacks.

Gas-cuts have also been experienced by Profertil, Dow Argentina and other local petrochemical companies.

Ethane is a crucial feedstock for Dow's polyethylene (PE) plant, which is in the Bahia Blanca petrochemical complex.

Due to the lack of ethane, the Dow plant is operating at 70% of nameplate capacity, an industry source said.

Concerns about Argentina’s energy supply were also raised by a report released by eight ex-energy secretaries.

The report criticised the nation's energy policy, saying it lacked a long-term outlook.

Argentina's petrochemical industry has frequently struggled with cutbacks in natural gas, as the nation's regulators rationed the fuel to make more available to heat houses.

Industrial supplies were cut in 2008 following a cold snap.

In 2007, the cutbacks and the resulting production disruptions were severe due to a particularly cold southern winter, in which it snowed in Buenos Aires.

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By: Cristina Kroll
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