APLA ’16: Dow to decide on Argentina cracker in next 12 months

BUENOS AIRES, Argentina (ICIS)–US-based Dow Chemical plans to make a decision on building a new worldscale cracker in Argentina in the next 12 months, an executive said on Friday.

“We plan to make a decision in the next 12 months, and our best estimate is for the cracker to start up in 2022,” Alberto Laveran, director of hydrocarbons in Latin America for Dow. He made his comments on the sidelines of the 2016 Petrochemical Seminar hosted by the PetroChemical Consulting Alliance ahead of the Latin American Petrochemical Association (APLA) annual meeting.

The Dow cracker would have a capacity of around 1.2m tonnes/year and downstream production would be all polyethylene (PE), he said.

Dow already has Argentina’s largest petrochemical complex in Bahia Blanca, Argentina, a location with access to rivers and the Atlantic Ocean for transportation of products within the country and to other nations in the region.

Dow’s ethylene capacity at Bahia Blanca is around 700,000 tonnes/year. Downstream, it has linear low density PE (LLDPE) capacity of 290,000 tonnes/year, high density PE (HDPE) capacity of 270,000 tonnes/year and low density PE (LDPE) capacity of 90,000 tonnes/year, according to ICIS plants & projects.

While there is an ample supply of petrochemical feedstocks in Argentina, the business environment has been poor for the last 12 years, hindering investment, he said.

There are no major investments planned in Argentina and Brazil that will bring on meaningful capacity, while the two major countries in South America have a polyethylene (PE) deficit of around 1.2m tonnes/year, said Laveran in a presentation at the event.

Laveran noted that Latin America PE demand has never dropped and has the potential to reach western European levels of over 25kg per person annually. North American per capita consumption is over 40kg per person.

“Any alternative in packaging is more expensive than PE,” he said.

However, obstacles to investment include the availability of capital in Argentina, as well as the willingness of society to accept the importance of commercially viable gas production, the executive noted.

“If there is no will, it doesn’t matter if the cost of recovery of gas is 20 cents [per MMBtu] – it will stay in the ground,” said Laveran.

The Petrochemical Seminar precedes the APLA annual meeting, the largest in the region.

INSET IMAGE: The Argentine flag. (Wilf Thorne/ISI/REX/Shutterstock)