APLA ’16: Argentina cracker likely LatAm’s next big project

BUENOS AIRES, Argentina (ICIS)–Dow Chemical’s planned ethane cracker in Argentina is the most likely and the only major project to be built in Latin America, a consultant said on Sunday.

“Whether it’s a new cracker or an expansion of the current complex in Bahia Blanca, it certainly will not have competition in the beginning [of its operation] – it’s a great opportunity for them to capture a large part of the Brazil market,” said Jorge Buhler-Vidal, director of Polyolefins Consulting.

Brazil and Argentina are part of the Mercosur trading bloc, along with Uruguay and Paraguay, providing for the free flow of goods between the countries.

While Brazil’s sole polyethylene (PE) producer Braskem is exporting the polymer, it is because the country has been suffering from a two-year recession. Normally, Brazil would be short PE, and there’s nothing on the table in terms of Brazil expansion projects, said Buhler-Vidal.

Dow is planning has an existing cracker complex at Bahia Blanca, Argentina, and plans to make a decision on a new cracker of up to 1.2m tonnes/year in the next 12 months, noted Alberto Laveran, Latin America hydrocarbons business director at Dow.

By 2022, Argentina could have sufficient natural gas liquids production to provide feedstock for a world-scale cracker, said Buhler-Vidal.

Also on the table in Bahia Blanca is a propane dehydrogenation (PDH) plant and a downstream polypropylene (PP) project, although that is “much lower key”. That project would be built by a company other than Dow, he noted.

Brazil is notable for the lack of any new major projects in the country, said Buhler-Vidal.

Braskem has no planned timeframe to make a final investment decision (FID) on the planned near doubling of ethylene capacity at its Duque de Caxias ethane cracker to around 1m tonnes/year, said Luciano Guidolin, executive vice president of  Braskem.

Bolivia started up its gas liquids separation plant in 2015 but has yet to build a cracker and downstream PE plant, noted Bihler-Vidal.

There has been some talk about a PDH plant and downstream PP, but “clearly it will be some time before that is built,” he said.

The key issue is the availability of natural gas. Bolivia has not been able to supply Argentina with enough gas as per contractual agreements, raising a red flag on future production capabilities, the consultant pointed out.

The APLA annual meeting runs through Tuesday in Buenos Aires.