Bolivia reveals plans for GTL, polyolefin, methanol complexes

30 October 2013 23:01 Source:ICIS News

Bolivia reveals plans for GTL, polyolefin, methanol complexesBy Simon West

MEDELLIN, Colombia (ICIS)--Bolivia’s ministry of hydrocarbons and energy has released a report detailing an ambitious petrochemical construction programme that seeks to kick-start a new era through the industrialisation of the nation’s huge natural gas reserves.

The plan aims to transform the country from “a traditional economy based on the export of raw materials to one of greater added value that generates more income and jobs”, according to Bolivia’s vice minister of hydrocarbons, Alvaro Arnez Prado.

Industrialisation of natural gas became a reality in May this year following the inauguration of the Rio Grande liquids separation plant in the eastern Bolivian department of Santa Cruz. The plant will process around 5.m cubic metres (mcm)/day of natural gas and produce 361 tonnes/day of liquefied petroleum gas (LPG) and 195 bbl/day of isopentane. The LPG and isopentane will be used as feedstocks to supply the petrochemical chain.

A second liquids separation plant in the Gran Chaco province of Tarija department in southern Bolivia is due to come on line in the second half of 2014. The plant will process natural gas to produce ethane, propane, butane among other products. The ethane and propane will serve as feedstock for the nearby Gran Chaco petrochemical complex.

The future success of the petrochemical projects listed in the report depends on a number of factors, including the ability to secure reliable and competitive feedstock sources; the performance of domestic and international markets; the availability of financial resources, technology and incentives for private, state and international capital; and political will, the ministry said.

The projects in the report are divided into “current” and “future”, and will be developed by state-run energy company Yacimientos Petroliferos Fiscales Bolivianos (YPFB) and Empresa Boliviana de Industrialisation de Hidrocarburos (EBIH), a subsidiary of YPFB created by the Bolivian government in 2008 to develop domestic gas-fuelled heavy industry.

A summary of the projects are listed below:

YPFB: current projects

An ammonia and urea plant is currently being constructed in Bulo Bulo in the central Bolivian department of Cochabamba, and constitutes the first major petrochemical project in Bolivia. The plant will produce approximately 700,000 tonnes/year of urea and 420,000 tonnes of ammonia. Operations are due to begin in October 2015. Korea’s Samsung Engineering was awarded an $844m (€616m) contract to design, engineer and build the plant. Samsung is also charged with the operation and maintenance of the plant in the first few years of operation. The ministry said that Bolivia imported 14,500 tonnes/year of urea.

An ethylene and polyethylene (PE) plant in Yacuiba in Bolivia’s Tarija department will use ethane feedstock from the Gran Chaco liquids separation plant. The plant will produce around 600,000 tonnes/year of various grades of PE, including high density PE (HDPE), low density PE (LDPE) and linear low density PE (LLDPE). Italian firm Tecnimont is carrying out a conceptual engineering study, after which the bidding process for the plant’s construction will begin. The plant is expected to start up in 2017. PE produced at the plant will be earmarked for the domestic market to boost the polymers industry, with surplus to be exported the ministry said.

Tecnimont is also carrying out preliminary studies for the construction of a propylene and polypropylene (PP) plant close to the Gran Chaco petrochemical complex. The studies will assess the feasibility of using propane derived from LPG at Gran Chaco. The plant will have an estimated capacity of 400,000 tonnes of PP.

YPFB is carrying out a feasibility study for the construction of a gas-to-liquids (GTL) plant that could reduce the country’s dependence on diesel imports. The study is focussing on the technical and financial viability of producing diesel from natural gas. According to the ministry, Bolivia imported an average 14,385 bbl/day of diesel in 2012, more than half of total domestic consumption. The plant would be in the central department of Santa Cruz and would produce around 30,000 bbl/day of fuels.

YPFB: future projects

YPFB is looking at the construction of an aromatics plant as an alternative for surplus LPG feedstock - although naphtha and other liquids would be preferable as a raw material. Demand for benzene, toluene and xylene (BTX) is minimal in Bolivia, with consumption reaching just 1,023 tonnes in 2012, according to the ministry. The plant would have an estimated capacity of 75,000 tonnes/year of benzene, 120,000 tonnes/year of toluene and 61,000 tonnes/year of xylene, although these figures would be adjusted according to the availability of butane and other feedstock from the Gran Chaco liquids separation plant. Production would be earmarked for the domestic market.

The construction of a polystyrene (PS) plant is also under consideration. In 2012, Bolivia imported around 9,000 tonnes of expandable PS (EPS) and 4,500 tonnes of other grades of PS. YPFB estimates that the plant would have a capacity of 100,000 tonnes /year.

EBIH: current projects

The Petrocasas plant in Caracollo, Oruro department, will produce heat-resistant polyvinyl chloride (PVC) polymer kits for the construction of components – including profiles, walls, roofs, doors, frames and windows – for prefabricated houses. The $42m project aims to resolve the housing deficit problem in Bolivia, and will begin construction at the end of 2014, the ministry said. The plant will produce 6,600 kits/year.

The El Alto plant in Bolivia’s capital La Paz will produce 3,100 tonnes/year of tubing for the country’s natural gas and water works, 175 tonnes/year of accessories for the gas network and 4,000 tonnes/year of films to be in waterproofing membranes products The plant will use PE as feedstock, which initially will be imported then supplied from the Gran Chaco ethylene and PE plant. Engineering studies have been completed, and EBIH is now evaluating the start of construction. Operations are expected to begin in the fourth quarter of 2014.

Preparations to begin conceptual engineering studies are currently being carried out for a methanol petrochemical complex, and are expected to be completed in the first quarter of 2014. The complex is expected to produce 500,000 tonnes/year of methanol and will require around 1.2mcm/day of natural gas feedstock. The complex will also produce dimethyl ether (DME), methyl tertiary butyl ether (MTBE), formaldehyde and acetic acid. The plant will require investments of around $450m.

The feasibility of a so-called methanol “mega-plant” with a capacity of 1m tonnes/year is also being considered – although it was unclear if this plant would be part of the same complex, or would constitute a second, stand-alone plant.

EBIH: future projects

A 200,000 tonne/year PVC plant at the Gran Chaco petrochemical complex is currently under consideration. The plant, which would require an estimated investment of $550m, would use around 90,000 tonnes/year of ethylene feedstock. Demand for PVC in Bolivia in 2012 reached 32,000 tonnes, while demand in 2016 is expected to rise to 60,000 tonnes.

The possibility of building an ethylene oxide (EO) and ethylene glycol (EG) plant close to the Gran Chaco liquids separation plant, with capacities of 260,000 tonnes/year of monoethylene glycol (MEG), 26,000 tonnes of diethylene glycol (DEG) and 3,000 tonnes of triethylene glycol (TEG), is currently being studied. The plant would use ethane and LPG feedstock, and require an investment of $580m.

The production capacity and investment required to build an ammonia nitrate plant will be defined after basic engineering studies have been carried out. Preliminary estimates suggest the plant could have a capacity of 400,000 tonnes/year and would cost $500m. The plant could use surplus production from the ammonia and urea facility currently being built in Cochabamba. The country imported around 21,000 tonnes of ammonia nitrate in 2012.

($1 = €0.73)

By Simon West