FocusPetrobras seeks to offer additional benzene into the US

05 October 2012 16:53  [Source: ICIS news]

A Petrobras tankHOUSTON (ICIS)--Brazil-based Petrobras is looking to gain a foothold in the US aromatics market by selling excess benzene from its Brazilian plants, a source with the company said.

Petrobras recently revamped its Refinaria Presidente Bernardes Cubatao (RPBC) complex in Sao Paulo state, a source said. The revamp has allowed Petrobras to export the benzene.

The company is expected to start offering some benzene next week to the US market and could have an additional 3,000-4,000 tonnes/month of benzene to offer.

However, the company source said it would only export the cargoes if the price makes sense. Otherwise Petrobras would keep the cargoes in the Brazilian domestic market.

The US typically imports about 100,000 tonnes of benzene monthly. Some trade sources have already said a small amount of benzene from Brazil will not mean much.

“I don't really see that volume making much of a difference,” said one US-based aromatics participant.

An extra 3,000 tonnes should not have any significant effect on prices, another US trade source said. “However, having another producer in the US Gulf will certainly change the dynamic of the marketplace, giving more leverage to consumers and traders. In addition, it should add more liquidity to the market”

Despite the limited volume expected to be offered next week, Petrobras may be able to ease some of the current tightness in US benzene supply.

Trade sources have attributed the increase and tightness to a shipping delay in some US benzene imports. US benzene imports from Asia are also expected to drop to about 55,000-60,000 tonnes in October because of a lack of cargoes and unfavourable price spreads.

US spot prices on Thursday have been discussed as high as $4.58-4.75/gal ($1,371-1,422/tonne, €1,056-1,095/tonne) FOB (free on board), well above spot levels of $4.31-4.43/gal FOB at the start of the week.

Other trade sources have noted that imports from Brazil could grow in the coming years, giving Petrobras a more significant role in the US market.

Petrobras recently announced plans in late August to modernise and expand its refinery operations by investing $71.6bn by 2016 to add 400,000 bbl/day capacity. The additional capacity would also include aromatics such as benzene, which the company would also look to export.

Earlier this summer, Petrobras expects that construction for the first of two refineries at the Comperj complex will be completed in April 2015.

When completed, the Complexo Petroquimico do Rio de Janeiro (Comperj) will have two refineries and several petrochemical units.

At its first phase, Comperj will be able to process 165,000 bbl/day of oil, the company said.

The second refinery should begin operations in January 2018, Petrobras said. It will have a capacity of 300,000 bbl/day.

The two refineries are among several that Petrobras is developing.

The Premium I complex in Bacabeira, Maranhao, will have two trains that can each process 300,000 bbl/day of oil. Construction should be finished in mid 2018.

The Premium II refinery in Caucaia, Ceara, should start-up by the end of 2017 or the beginning of 2018.

Petrobras is undertaking the refinery projects as fuel demand is expected to increase in Brazil.

Derivatives demand, currently at 2.1m bbl/day, is expected to reach 3.4m bbl/day by 2020, Petrobras said.

Additional reporting by Al Greenwood

($1 = €0.77)

By: Brian Balboa
+1 713 525 2653

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