Argentina cold snap brings natgas cuts to petchems

24 July 2013 23:08  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Freezing weather in Argentina has led to record levels of natural gas consumption, the country’s government said on Wednesday, forcing authorities to increase supply cuts to petrochemical producers.

The country’s planning ministry, Minplan, said that domestic consumption of natural gas reached 100m cubic metres (mcm) on Monday, beating all previous records.

Furthermore, the Argentine Interconnection System (SADI) registered a power record for a working day, when domestic demand reached 22,533 megawatts (MW).

The country’s natural gas regulator, Enargas, quickly imposed restrictions on industry access to natural gas to ensure supplies to homeowners, who use the fuel to heat their houses. Companies with interruptible contracts faced the heaviest cuts, according to the regulator.

Petrochemical producers, hard hit by the restrictions in supply due to their intensive use of natural gas as feedstock, are now planning in advance under the assumption that cutbacks in the southern hemisphere’s winter months are inevitable.

Latin American polyvinyl chloride (PVC) producer Solvay Indupa said that its annual plant turnaround at the Bahia Blanca petrochemical complex in Buenos Aires province is scheduled for July each year to dovetail with the cutbacks. However, the company warned that production would be affected should the cold weather continue.

“If the low temperatures registered during these days persist, the cut in the supply of natural gas will affect the production process, which is scheduled to restart on 1 August,” said a spokeswoman for Solvay.

The company has boosted its inventories of PVC to minimise the impact of an ethylene shortage, while import levels have also been increased, the company said.

Dow Argentina, which operates two ethane crackers at Bahia Blanca, which in turn feed four polyethylene (PE) plants, said that although cutbacks were affecting production levels, there has been no risk to the supply of Dow products in Latin America.

“Dow is working with government authorities to minimize the impact of these restrictions,” said Dow spokeswoman Eugenia Santos. “We are aware that efforts are being made to stabilise the energy market.”

Argentinian fertilizer producer Profertil, co-owned by Canada’s Agrium, said that its Bahia Blanca urea and ammonia plant is also undergoing planned maintenance until the end of the month. The company didn’t comment on the likelihood of disruption to operations if cutbacks continue into August.

According to the Argentina’s National Meteorological Service (SMN), warmer weather is due to set in on Thursday. Winter in Argentina lasts from June to September.

By: Simon West

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