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Petrochemicals in Peru

Hydrocarbon Engineering,

BMI have said in a new report that petrochemical plants in Peru have been delayed by a lack of gas and infrastructure such as pipelines. The report has also said that Peru’s significant commercially viable gas reserves, with ethane content at 10%, promise to drive growth in petrochemicals over the long term. Yet, the country has so far failed to leverage its potential and create a petrochemicals industry, according to BMI. Developing fertiliser production has been the first choice to add value to the country’s natural gas production.

Peru’s petrochemical past
Last year, Peru continued to possess no production capacity for basic petrochemicals such as ethylene, propylene or polymers so, even a small domestic market would meat the development of the petrochemical sector would be export oriented. Peru has massive gas resources which are concentrated around the Camisea gas field and these could support at least one world scale 1 million tpa cracker and downstream production. The country is therefore in a rather unique position in South America with its access to abundant ethane feedstock that could support low cost petrochemicals production. This would put it at a distinct advantage compared with neighbouring states that are dependent on naphtha feedstock, which is susceptible to fluctuations in oil prices.

Pipeline plans
Developing a pipeline between the gas fields to petrochemicals complexes is crucial. There are plans for a new southern pipeline which could help supply domestic markets and connect with yet to be built petrochemical and/or thermal projects in the south of the country, but they have faced continual setbacks. There does not appear to be an imminent prospect of a breakthrough on the issue either.

Fertiliser, the way forward?
The development of fertilisers and fertiliser production has been the first choice in Peru to add value to its natural gas production. Fertiberia, a subsidiary of Grupo Villar Mir is planning a US$ 2 billion nitrogen fertiliser plant and it is expected to be completed in the second half of 2017. The plant will export fertilisers to countries throughout Latin America and will produce up to 1.2 million tpa of urea and 1.1 million tpa of ammonia. The urea lines are expected to consume 700 000 tpa of feedstock.

Adapted from press release by Claira Lloyd

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