Tight natgas, maintenance, demand create Venezuela resin deficit

21 October 2011 21:37  [Source: ICIS news]

CARACAS (ICIS)--Venezuela has a resin trade deficit because of a shortage of natural gas, maintenance issues and rising demand, caused by the government's petrocasas subsidised housing programme, the president of the state petrochemical company said on Friday.

The country could address the deficit by sharply increasing resin production and by importing polypropylene (PP) and polyethylene (PE) from Brazil, said Saul Ameliach, president of Venezuelan state petrochemical producer Pequiven.

Ameliach made his comments during a presentation at the 7th International Plastics Congress. The annual event is sponsored by Avipla, a trade group representing the nation's plastics processors.

“That is exactly what we were hoping to hear. Ameliach is very clear about what the situation in the country is, what are our needs, in regards of the lack of resins,” said Hugo Dell’Oglio, president of the Venezuelan Plastic Industry Association (AVIPLA), a trade group that represent's the country's plastics processors.  

Venezuela has a nameplate capacity of 694,000 tonnes/year of mostly PP, PE and polyvinyl chloride (PVC). However, this year, the country had to import 88,000 tonnes of resin to cover demand from local processors, Ameliach said.

“They have a plan, an aggressive plan, to cover those needs”, said Dell’Oglio.

He added that Pequiven had informed him that a new deal had been struck with Braskem to import PP and PE from Brazil “to cover resins need for next year”.

During his presentation, Ameliach said that “a Brazilian company” was to provide the resins, without identifying it by name.

“They know what the problem is, they identified it, and we think we will have fewer problems next year with the resins than we had this year, which was bad,” said Dell’Oglio.

On the domestic production side, off-the-charts demand, lack of natural gas and maintenance problems remain obstacles, he added.

“The growing demand has meant that maintenance has been postponed in some cases, so there are now maintenance problems, specifically in the PE plant in Polinter, which is not at 100% right now," he said. "And yes, Propilven has had problems with natural gas supplies, but I hear they are working on it,” Dell’Oglio added.

Venezuela produces some 6.3bn cubic feet/day (bcf/day) of natural gas, but uses about 70% of that production just to keep oil pumping in maturing oil fields.

Government planners in PDVSA and Pequiven routinely speak of a natural gas deficit of around 1 bcf/day.

For more on resins visit ICIS chemical intelligence

By Carlos Camacho

By: Staff Reporter
+44 20 8652 3214

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