Dow reduces run rates at Argentina cracker amid Govt imposed natural gas reductions

03-Jun-15

Dow has reduced run rates to 90% at its Argentinian cracker amid government-imposed natural gas curtailments, as per a company source in Platts. Every winter since 2006, the Argentinian government has curtailed ethane and LPG supplies to industrial users by up to 30%, and the start of this winter's cuts kicked in over the weekend. Dow "began following processing restrictions [imposed] by the authorities that manage the country's energy," the source said. The reduced run rate was not due to any ethane shortages from Mega, Dow's main feedstock supplier, or any issues at the joint venture's plants. The restrictions began to diminish considerably thanks to imports of gas and new gas supplies, both conventional and unconventional. "We hope that similar to 2014, fewer restrictions will happen this year," the source said. Dow Argentina has been looking to North America for ethylene prior to the reduction in run rates, market sources say. Dow Argentina operates two ethane-fed steam crackers and polyethylene production at its Bahia Blanca petrochemical complex. Ethane is a natural gas liquid used in the production of ethylene, which can then be transformed into polyethylene. Dow's Bahia Blanca site has an ethylene production capacity estimated at 765,000 mt/year, according to Platts Analytics data. Petrochemical producers in Argentina see feedstock supply curtailments during the winter months, when heating and other residential use tends to be at its highest, the source said.