APLA ’23: Argentina, Bolivia NGL exports could change LatAm’s petchems landscape – analyst

SAO PAULO (ICIS)–Plans by Argentina and Bolivia to expand natural gas production could make them net exporters of natural gas liquids (NGL), potentially changing Latin America’s petrochemicals landscape, an analyst at Opis said on Sunday.

Adrian Calcaneo, vice president for energy and feedstocks NGL and naphtha at the energy consultancy, added however that many things would need to fall into place in crisis-ridden Argentina to make the country a new El Dorado for natural gas production.

Argentina holds large reserves of crude oil and natural gas in the Vaca Muerta fields in the Patagonia region and it is building an export terminal in Bahia Blanca.

Moreover, as Brazil expands its crude oil and natural gas production from pre-salt reserves, the country could also have NGLs to spare.

Latin America’s petrochemicals production is mostly based on crude oil-derivative naphtha; meanwhile, the US has greatly moved to natural gas-based ethane and NGLs on the back of the shale gas boom.

“Argentina is expected to double its exports of [NGLs] propane and butane in the next few years, so we could see some diversification in Latin America to ethane and away from naphtha. [With Argentina’s expected natural gas boom] ethane would also be available,” said Calcaneo.

“The speed of growth in supply from Argentina and Bolivia could give way to some PDH [prophane dehydrogenation] plants. Clearly, the opportunity is there, and it is worth evaluating. If China has built many PDH plants, why couldn’t Colombia, for example, do the same?”

China has added large capacities for petrochemicals, but the country lacks the feedstocks to feed the plants on its soil: the boom in US NGL supply has allowed the country to add several PDH plants.

Calcaneo was speaking to delegates at the annual meeting of the Latin American Petrochemical and Chemical Association (APLA).

Finally, Brazil’s pre-salt reserves, which lie deep in the Atlantic Ocean, could also present Latin American with another opportunity to diversity away from naphtha.

However, the Opis analyst added that could take several years to materialise.

“There are many questions surrounding Latin America’s NGL and ethane supply. When will we have more Brazilian new liquids [coming from higher pre-salt production]? Will we see a huge explosion of liquids in Argentina? Are there real opportunities here?” said Calcaneo.

“There is a lot to be defined yet.”

Front page picture: Facilities operated by Argentina’s state-owned energy major YPF in Vaca Muerta, Patagonia region
Source: YPF

The 43rd APLA annual meeting takes place 11-14 November in Sao Paulo, Brazil.