Argentina’s polymer sector operates at 30-40% for second week on natural gas scarcity

22-Jul-10

Major producers in Argentina's polymer sector are operating plants at 30-40% capacity for a second consecutive week on inadequate natural gas supplies, as per Platts. Temperatures in the country have dipped below zero last week after averaging 5-10 Celsius in the previous week. The cold weather has driven up residential gas demand by 60-67 million cu m/d. Compania Mega, Argentina’s largest producer of butane, propane and ethane, was operating at 35% last week. This week, operations are at 40% of capacity, leading to a reduction in sales of ethane to Dow Chemical’s 700,000 tpa ethylene plants and 600,000 tpa HDPE, LDPE and LLDPE facilities in Bahia Blanca. It also is selling less butane, propane and natural gasoline to Petrobras Energia, a unit of Brazil's Petrobras, for making LPG a fuel consumed by about 45% of the country's 10 mln homes and used as a feedstock for petrochemicals like ethylene, benzene and toluene. Mega, a venture of Dow Chemical (28%), Spains Repsol (38%) and Brazil's state-led Petrobras (34%), gets gas supplies from Repsol-backed YPF's Loma La Lata field in Neuquen. The company has the capacity to produce 540,000 tpa of ethane, 365,000 tpa of propane, 235,000 tpa of butane and 220,000 tpa of natural gasoline at Bahia Blanca. The government has been restricting gas deliveries to factories and power plants so homes get sufficient supplies, as deficit is at 25 million cu m/d, or 20% of the average demand.