Venezuela's expansion plans for its petrochem sector upto 2012

14-Jul-05

Venezuela, prominent for its natural gas reserves, the largest in South America, first developed its petrochemical sector in the nation about half a century ago. It has plans for further expansions with funds to come in from the "surplus reserves" that the State government expects to receive from the Central Bank, which has above US $28 billion in reserves, estimated almost 30% more than the amount needed in recent years by the Venezuelan economy. The government is planning to invest about US $10 billion over the next 7 years in the petrochemical industry, aiming at raising its current output of 11.4 million tons annually to 25 million tons by the financial 2012. The natural gas available in the oil-producing area of northwestern Venezuela is shared among the Paraguana refinery complex in the northwestern tip of the country, the El Tablazo petrochemical complex, domestic consumption and re injected into the wells that produce crude oil. Venezuela is analyzed to have difficulties involving the transportation of enormous volumes of natural gas produced in eastern Venezuela to the country's western region. This problem will be solved considerably with a natural gas pipeline being planned, linking east and west Venezuela. This pipeline scheduled for December is regarded as the first step towards modernization and expansion of the country's petrochemical complexes beginning with El Tablazo, then Moron and Jose. Modernization plans and expansion goals are underway at three industrial parks: the state-owned El Tablazo and Moron complexes in north - central Venezuela and the Jose industrial park in the east. The state-run petrochemical company Pequiven, formerly a subsidiary of state-owned oil giant PDVSA, is considered to be made oil independent so as to enable it to gain greater flexibility in business operations. This is inferred to have led to the establishment of the Venezuelan Petrochemical Corporation, whose first undertaking has been the signing of an agreement with the Brazilian company Braskem, for the joint construction of a plant with the capacity to produce 400,000 tons of polypropylene annually. The plant is scheduled to commence its operation in 2007. Plans are underway for the construction of a new petrochemical complex in Guiria located in the country's northeastern tip, near the rich natural gas fields off the southeastern Caribbean shared by Venezuela and Trinidad and Tobago.