07 November 2010 17:13 [Source: ICIS news]
RIO DE JANEIRO (ICIS)--Project delays in Latin America are expected to result in the next wave of new petrochemicals capacity coming on stream in 2014-17, a consultant with US-based Nexant said on Sunday.
The new projects are now expected to start up during a period of improved demand, said Raul Arias, Nexant senior consultant and manager for Latin America.
The timing of the projects has improved relative to the recovery of the global chemicals sector and the start-up of new petrochemicals capacity in the Middle East and Asia, he said.
“The global recovery is already on its way up,” he said. “We see the peak of the industry occurring around 2015.”
There will still be some overcapacity, but not as much as there would have been if the projects were proceeding as originally planned, he told ICIS on the sidelines of the Latin American Petrochemical Association (APLA) annual meeting.
Two years ago, there was huge optimism about the large-scale projects scheduled to start up in Latin America in 2012-14, he said. But then the economic crisis hit, forcing companies to re-evaluate projects and to shut down some capacity.
Lower oil prices and reduced access to credit have also contributed to the delays. Lower crude oil prices are affecting the resources of some companies such as Venezuela’s state-owned Pequiven, Arias said.
During the crisis, the business environment also changed for players such as Dow Chemical, which was planning an ethanol-based polyethylene (PE) complex in Brazil, and LyondellBasell, which was planning a project in Trinidad, he said.
Other projects facing delays include Petrobras’s Comperj (Petrochemical Complex of Rio de Janeiro), which is now expected to start up in 2016-2017, and Pequiven’s joint venture projects with Brazilian producer Braskem in Venezuela.
Projects are also under consideration in Peru and Colombia. In Peru, gas reserves in Camisea still need to be evaluated.
“There has not been confirmation of enough proven reserves to justify investment in petrochemicals projects,” Arias said.
Colombian energy group Ecopetrol said last month its proposed petrochemicals investments were still in the planning phase.
APLA lasts through Tuesday.
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