APLA ’17: Argentina YPF reviewing feedstock for possible petchem plants

RIO DE JANEIRO, Brazil (ICIS)–Argentine state energy producer YPF is in the early stages of assessing how much feedstock is available for possible petrochemical plants, an executive with the company said on Monday.

Argentina has recently reversed its declines of natural-gas production by developing its reserves of shale gas in the Vaca Muerta formation.

These new, unconventional sources of energy are also providing the country with ethane, propane and other natural gas liquids (NGLs), which could be used as feedstock for new petrochemical capacity, said Santiago Martinez Tanoira, executive vice president, exploration and production, for YPF. He made his comments during a presentation at the annual meeting of the Latin American Petrochemical Association (APLA).

Argentina has crackers that can use ethane as a feedstock, and the Vaca Muerta is already well served by midstream infrastructure. The formation is in Neuquen province, the heart of Argentina’s oil production.

If Argentina does expand petrochemical capacity, the new plants could serve both Argentina and the other members of the Mercosur trading bloc.

Among the members of the trading bloc is Brazil, the largest economy in Latin America and the second largest in the Western Hemisphere.

While demand in Brazil is still lacklustre, it still represents a huge potential market for petrochemical producers in Argentina, Martinez Tanoira said.

The region could support one or two crackers, but YPF would need more knowledge about the market before it can move forward with such a plan, he said.

Such a cracker could be flexible, running on propane or butane as well as ethane, he said.

For methane, YPF is considering urea and ammonia, he said.

The APLA annual meeting runs through Tuesday.