Latin America Petrochemical and Polymers Outlook 9-13-12

Petro
Chemical
Consulting
g
Alliance

Latin America Petrochemical and
Polymers Outlook

by
Jorge O. Bühler-Vidal

ICIS World Chemical Purchasing Summit
g
Boston
September 13, 2012

North Brunswick – Los Ángeles – Bogotá – São Paulo – Buenos Aires
Bahía Blanca – Mendoza – Santiago – Porto Alegre – Guatemala – Atlanta – Charleston – Houston – New York

Polyolefins Consulting, L.L.C.
APLA Logística 12 de junio, 2012 www.polyolefinsconsulting.com

Outline
O tli
Introduction
Producers and demand
Growing companies
Regional situation
– Brazil
– Bolivia
– Peru
– Venezuela
– Mexico
– Others
The value chain
Sourcing products and services
Opportunities

An
A exploration of potential opportunities
l ti f t ti l t iti
ICIS BOS September 13, 2012 www.polyolefinsconsulting.com

Petro
Chemical
Consulting
g
Alliance

Provides consulting products and services to clients in the
worldwide petrochemical and plastics industries, combining
local insights with a global perspective

Members

– Dr. Alfredo Friedlander, Buenos Aires, Argentina
– INovatius ICS, São Paulo, Brazil
– Meem Consulting, Costa Mesa, CA, USA
– Multidynamics Ltda., Bogotá, Colombia
y , g ,
– Polyolefins Consulting, LLC, North Brunswick, NJ, USA

The b
Th broadest network of petrochemical consultants in the
d t t k f t h i l lt t i th
American continent

Petro
Chemical
Consulting
g
Functional and geographical coverage
F ti l d hi l Alliance

Highly experienced consultants Professionals specialized in:
located throughout the
l t d th h t th – P j
Project planning
l i
Americas – Product development and
– Argentina applications
• Buenos Aires, Bahia Blanca, – Development and selection of
Mendoza production t h l
d ti technology
– Brasil – Operations
• São Paulo, Porto Alegre – Logistics
– Chile – Commercialization, marketing and
g
• Santiago sales
– Peru – Technology and technical service
• Lima for converters
– Colombia
• Bogotá Relationships with related and
– Guatemala complementary consulting firms
• Guatemala
– U.S.A.
USA
• Los Angeles, Houston,
Atlanta, Charleston, New
York
Covering polyolefins and sectors of the petrochemical
C i l l fi d t f th t h i l
industry functionally and geographically

Latin A
L ti America - A R i
i Region K
Known b
by…
Natural wonders and culture

Is generating global brands

Has
H a generally positive
ll iti
business environment
– The world’s most pacific
region
– Joined by two major
languages
– Generally stable
governments t
– Mildly affected by the
global economic crisis
– Generally investment
friendly

Where are the opportunities?
Wh th t iti ?

External Perception of Latin America and the
Caribbean
C ibb
Brasil, Chile, Peru and Colombia
– Predictable without surprises
Predictable,
– Government encouraging investments
and projects

Bolivia, Ecuador, Trinidad & Tobago, and
Venezuela
– Vulnerable, depend on one main export
product

Argentina, Bolivia, Ecuador and Venezuela
– E ti economic policies, f
Erratic i li i fuzzy models
d l
– Legal uncertainty

México
– Very interconnected with the U.S.
US
– Declining oil reserves

Braskem and Petrobras are behind most of
the regional polyolefins projects

The most active area for petrochemical projects after
Asia, Middle East, and U.S.-Canada

Significant Petrochemical Countries
Gross Domestic P d t A
G D ti Product Annual Growth [%]
lG th
Country 2009 2010 2011 2012 f 2013 f
North America 2.0
20 2.2
22 2.5
25
Canada -2.8 3.2 2.5 2.1 2.2
Mexico -6.3 5.5 4.0 3.6 3.7
United States -3.5 3.0 1.7 2.1 2.4
South America 4.8 3.8 4.3
Argentina 1 0.9 9.2 8.9 4.2 4.0
Bolivia 3.4 4.1 5.1 5.0 5.0
Brazil -0.3
0.3 7.5 2.7 3.0 4.1
Chile -0.9 6.1 5.9 4.3 4.5
Colombia 1.7 4.0 5.9 4.7 4.4
Ecuador 0.4 3.6 7.8 4.5 3.9
Peru
P 0.9
09 8.8
88 6.9
69 5.5
55 6.0
60
Venezuela -3.2 -1.5 4.2 4.7 3.2
Caribbean 2.8 3.5 3.6
Trinidad and Tobago -3.3 0.0 -1.3 1.7 2.4
Latin America and Caribbean -1.6 6.2 4.5 3.7 4.1
Source: IMF, April 2012. Figures are based on official GDP data. f - Forecasted figures.
1 Estimates by private analysts have shown growth that is, on average, significantly lower than official GDP growth from 2008 onward..

IMF sees Latin America very dependent on commodity
prices, vulnerable to a slowdown in China and Asia

Capacity of L
C it f Largest Thermoplastic Producers
t Th l ti P d

Americas PE – PP – PVC Worldwide

12,000
7,000

510
6,000 10,000

5,000
1,230
1 230 8,000
2,915 627

4,000
PVC
kt/yr 6,000
kt/yr 1,731 PP 10,914
PE
3,000
9,311
8,668
1,210 4,000 7,749
7,284 7,109
4,077 4,200 6,541
,
2,000
2 000 6,460

3,035 822 4,681 4,564
2,525 4,303 4,079
2,340 2,311 2,000
1,000

1,050

0 0
Lyondell Exxon Mobil Sinopec Dow Formosa SABIC INEOS Braskem Total IPIC Reliance PetroChina
Braskem Exxon Mobil Dow Lyondell Basell Formosa Shintech Chevron Phillips Basell

Source: Braskem

Region has th
R i h three of the world’s largest producers
f th ld’ l t d

World Pl ti P d ti
W ld Plastics Production 2010

Source: PlasticsEurope

Latin A
L ti America has potential for growth above its 5 %
i h t ti l f th b it
population proportionality

Plastics D
Pl ti Demand by Region
db R i
139
136
140

120
108
105
99
100
89

80
kg
per
capita
60
45 48
46 50
40 40
32 36
30
24
20
21
20 16
11
0 9 10 2015 e
7
NAFTA
W. Europe
p 2005
Japan
J 2 Year
Y
World 3
C. Europe 1980
& CIS Latin
America Asia other
Region MEA
Source: PlasticsEurope

Latin A
L ti America has potential for growth
i h t ti l f th

Ethylene Projects - W ld
Eth l P j t World
EUROPE CHINA
Capacity Start Up Capacity Start Up
Company Country Status Company Status
[kt/yr] [year] [kt/yr] [year]
Repsol Polimeros Portugal 570 2011 delayed Baotailong/LongMay Mining Group 300 study
Gazprom Neftekhim Salavat Russia 380 2015 engineering underway China Coal Shaanxi Yulin Energy & Chemical 570 2013 engineering underway
Kazanorgsintez JSC - (KOS) Russia 605 2010 complete CNOOC 1,500 2016 study (feasibility)
Nizhnekamskneftekhim Russia 1,000
, p
planned CNOOC 1 000
1,000 2016 planned
Novourengoyski Gas Chemical Complex Russia 340 2013 under construction Consortium 1,000 study
Sibur Russia 1,500 2017 study Dalian Shide Group 1,300 2011 + study
Taneco OJSC Russia 600 study Daqing Petrochemical 600 2T 2012 engineering underway
VNHK - Rosneft Russia 1,400 planned Dow Chemical/Shenhua 600 delayed
6,395 FREP 1,100 4T 2013 planned
Fushun Petrochemical 800 2T 2012 engineering underway
Kuwait Petroleum/Sinopec 1,000 2015 under construction
U.S. - CANADA Lanzhou Petrochemical 450 2Q 2011 planned
Capacity Start Up Ningbo Lingzhou Chemical 40 planned
Company Location Status
[kt/yr] [year] PetroChina Sichuan Petrochemical 800 2013 delayed
Aither - Bayer Appalacchia - 2015 pre-feasibility Qingdao Petrochemical 1,000 Pre-2020 study (feasibility)
Appalachian Resins NE U.S. 227 2016 study (feasibility) Rosneft / China National Petroleum Corp. (CNPC) 1,200 study
BASF FINA Porth Arthur, TX - 2014 pre-feasibility Shaanxi Shenmu Chemical Industrial 150 2013 planned
Braskem - pre-feasibility Shaanxi Xingwang Group 350 2015 study
Chevron Phillips Cedar Bayou, TX 1,500 2017 planned g p gy
Shaanxi Yanchang Petroleum Group Yulin Energy &
Dow Chemical Freeport, TX 1,500 2014-2017 study (feasibility) 80 engineering underway
i i d
Chemicals
Dow Chemical 800 planned Shanghai Petrochemical Co. - (SPC) 700 2011-2012 study
Eastman Longiew, TX - engineering underway Shanxi Coking 300 2T 2014 under construction
ExxonMobil Baytown, TX 1,500 2016 engineering underway Sinochem Quanzhou Petrochemical 2,400 4T 2014 study
Formosa Point Comfort, TX 800 2016 pre-feasibility Sinopec 1,000 2016 study (feasibility)
Indorama 1,300 2018 study (feasibility) Sinopec 1,000 2016 + study (feasibility)
INEOS Chocolate Bayou, Alvin, TX 210 2013 study Sinopec 600 under construction
LyondellBasell Channelview, TX 227 2012 planned Sinopec Hainan Refining & Chemical Co. - (HRCC) 1,000 2015-2016 study
LyondellBasell Morris, IL 45 2013 planned Sinopec Shanghai Gaoqiao Petrochemical 1,000 study
LyondellBasell La Porte, TX 386 2014 planned MIDDLE EAST Sinopec Wuhan Petrochemical 800 H1 2013 under construction
LyondellBasell - Partner - study Sinopec/Henan Coal Chemical Group 900 planned
Capacity Start Up
Mexichem - OxyChem Ingleside, TX 500 2016 study Company Country Status Skyford Chemical - 1H 2012 under construction
[kt/yr] [year]
Sasol Lake Charles, LA 1,400 2019 study Taizhou Petrochemical 1,200 2013 study
Gachsaran Petrochemical Iran 1,000 2015 under construction
Shell Monaca, PA 1,300 2016 pre-feasibility
Ilam Petrochemical Iran 500 2015 under construction Wison Nanjing Chemical 145 2013 under construction
Westlake Chemical Calvert City, Ky 204 1H 2014 study
Kavian Petrochemical Iran 1,000
1 000 2012 under construction Xinjiang Guanghui Industry - 2015 study
Westlake Chemical Lake Charles, LA 113 4Q 2012 study (feasibility)
Kavian Petrochemical Iran 1,000 2013 engineering underway Yanchang Petroleum Group/Shaanxi Government 100 engineering underway
Persian Gulf Iran 600 2014 study Zhejiang Xingxing New Energy 300 2013
Williams Geismar, LA 272 3Q 2013 study
Equate Petrochemical Kuwait 1,400 2015 + study 25,285
TOTAL 12,397
Duqm Refinery and Petrochemical Complex - (DRPC) Oman - study (feasibility)
Oman Petrochemical Industries Co. - (OPIC) Oman 850 1Q 2012 on hold
ExxonMobil Chemical/Qatar Petroleum Qatar 1,600 4T 2015 study
Qatar Petrochemical Co Ltd - (Qapco) Qatar 900 1Q 2014 study
Ras Laffan Olefins Co. - (RLOC) Qatar 1,450 study
Shell/Qatar Petroleum Qatar 1,300 2017 planned
Rabigh Refining and Petrochemical - (Petro-Rabigh) Saudi Arabia 1,600 2015 study (feasibility)
Sadara Chemical Saudi Arabia 1,500 2H 2015 approved
Saudi Polymers Co Saudi Arabia 1,165 Q1 2012 complete
Petkim Turkey 575 study
Abu Dhabi National Chemicals (ChemaWEyaat) UAE 1 450
1,450 2015 + planned REST OF ASIA
LATIN AMERICA AND CARIBBEAN Abu Dhabi Polymers Co Ltd - (Borouge) UAE 1,500 2T 2014 under construction Capacity Start Up
Capacity Start Up Company Country Status
Company Country Status 19,390 [kt/yr] [year]
[kt/yr] [year]
ASM Chemical Industries Bangladesh 300 study
Dow Quimica Argentina 400 on hold
Brahmaputra Cracker and Polymers Ltd. - (BCPL) India 220 1H 2013 engineering underway
YPFB Bolivia 1,050 2016 bidding
Indian Oil Corp - (IOC) India 850 2015 study
Braskem JV Bolivia - Brazil 600 on hold
ONGC Petro-additions Ltd - (OPaL) India 1,100 H1 2013 under construction
Braskem Brazil 500 study
Reliance India 1,400 4Q 2015 engineering underway
COMPERJ Brazil 960 2018 planned
Kazakhstan Petrochemical Industries - (KPI) Kazakhstan 840 2016 study
Dow Chemical - Mitsui Brazil 350 2015 planned
Petronas Malaysia 1,200 4T 2016 study (feasibility)
Solvay Brazil 60 1Q 2015 planned
Petronas Malaysia 1,000 study (feasibility)
Ecopetrol Colombia 1,000 2017 pre-feasibility
JG Summit Petrochemical Philippines 320 1H 2013 under construction
PDV - CUPET Cuba 200 study
ExxonMobil Singapore 1,000 2H 2012 under construction
Braskem IDESA Mexico 1,050 1Q 2015 engineering underway
Shell Singapore 960 2014-2015 planned
Pemex Mexico 900 2014-2015 study South Korea 1,000 5 2012 planned
Honam Petrochemical
Pemex Mexico 900 2014 2015
2014-2015 study AFRICA Samsung Total Petrochemicals
S T t lP t h i l South Korea
S th K - 2011 under construction
d t ti
PetroPeru - Braskem Peru 1,200 2018 study Capacity Start Up
Company Country Status Samsung Total Petrochemicals South Korea 1,000 2011 under construction
Trinidad and [kt/yr] [year]
SABIC and SINOPEC - study CPC Taiwan 600 1Q 2013 planned
Tobago Total/Sonatrach Algeria 1,100 2014 delayed Kuokuang Petrochemical Technology Corp Taiwan 1,200 2015 uncertain
Polimerica Venezuela 1,300 2015 study Sidi Kerir Petrochemicals - (Sidpec) Egypt 460 planned Long Son Petrochemical Co Vietnam 1,400 2014 study
10,470 Viva Polymers Ltd Nigeria - delayed
14,390
Sasol South Africa 48 approved
1,608

Sources: ICIS Chemical Business and Polyolefins Consulting

Latin A
L ti America has almost 12% of the global increase
i h l t f th l b l i

Ethylene Projects - A
Eth l P j t Americas
i
U.S. - CANADA
Capacity Start Up
Company Location Status
[kt/yr] [year]
Aither - Bayer Appalacchia - 2015 pre-feasibility
Appalachian Resins NE U S
U.S. 227 2016 study (feasibility)
BASF FINA Porth Arthur, TX - 2014 pre-feasibility
Braskem - pre-feasibility
Chevron Phillips Cedar Bayou, TX 1,500 2017 planned
Dow Chemical Freeport, TX 1,500 2014-2017 study (feasibility)
Dow Chemical 800 planned
Eastman Longiew, TX - engineering underway
ExxonMobil Baytown, TX 1,500 2016 engineering underway
Formosa Point Comfort, TX 800 2016 pre-feasibility
Indorama 1,300 2018 study (feasibility)
INEOS Chocolate B
Ch l t Bayou, Al i TX
Alvin, 210 2013 study
t d
LyondellBasell Channelview, TX 227 2012 planned
LyondellBasell Morris, IL 45 2013 planned
LyondellBasell La Porte, TX 386 2014 planned
LyondellBasell - Partner - study
Mexichem - OxyChem Ingleside, TX 500 2016 study
Sasol Lake Charles, LA 1,400 2019 study
Shell Monaca, PA 1,300 2016 pre-feasibility
Westlake Chemical Calvert City, Ky 204 1H 2014 study
Westlake Ch i l
W tl k Chemical Lake Charles, LA
L k Ch l 113 4Q 2014 study (f
t d (feasibility)
ibilit )
Williams Geismar, LA 272 3Q 2013 study
TOTAL 12,397

LATIN AMERICA AND CARIBBEAN
Capacity Start Up
Company Country Status
[kt/yr] [year]
Dow Quimica Argentina 400 on hold
YPFB Bolivia 1,050 2016 bidding
Braskem JV
B k Bolivia Brazil
B li i - B il 600 on h ld
hold
Braskem Brazil 500 study
COMPERJ Brazil 960 2018 planned
Dow Chemical - Mitsui Brazil 350 2015 planned
Solvay Brazil 60 1Q 2015 planned
Ecopetrol Colombia 1,000 2017 pre-feasibility
PDV - CUPET Cuba 200 study
Braskem IDESA Mexico 1,050 1Q 2015 engineering underway
Pemex Mexico 900 2014-2015 study
Pemex Mexico 900 2014-2015 study
PetroPeru - Braskem Peru 1,200 2018 study
Trinidad and
SABIC and SINOPEC - study
Tobago
Polimerica Venezuela 1,300 2015 study
10,470

Sources: ICIS Chemical Business and Polyolefins Consulting

Abundant U.S. h l
Ab d t U S shale gas i fl
influences some Latin American
L ti A i
projects

Ethylene Projects – Addi
Eth l P j t Adding 89,935 kt
89 935
Africa, 1,608
Europe, 6,395

China, 25,285
LAC, 10,470

U.S. -
Canada, 11,670

ME, 19,390
Capacities in kt/yr ROA, 14,390
Source: ICIS Chemical Business and Polyolefins Consulting

is displaced from 4th place in capacity increases
LAC i di l df l i it i

PE Producers LAC
Installed C
I t ll d Capacity End of 2007, 2009 and 2012
it E d f 2007 d

Rio Polimeros Dow
11% 13% Dow
Ipiranga Pemex
Quattor 13%
11% Pequiven 20%
19%
8%
Polietilenos União
3% Pequiven
Pet. Triunfo 10% Pequiven
3% 10%
Dow Solvay Solvay
Ecopetrol
14% 2% 2%
1%
Ecopetrol
E t l Ecopetrol
Polimerica
1% 1%
0%
Braskem - IDESA
0%
Pemex
20% COMPERJ
0%

Pemex Braskem
20% 27%
Braskem
35% Braskem
56%

4,647
4 647 kt/yr 5,354
5 354 kt/yr 5,468
5 468 kt/yr
Source: Polyolefins Consulting, LLC

All Brazilian producers consolidated into Braskem

PP Producers LAC
Installed C
I t ll d Capacity End of 2007, 2009 and 2012
it E d f 2007 d

Ipiranga Propilco
8% Propilco Petroken
Indelpro Petroken 12% 16% 7%
8% 7%
Indelpro Petroken
Petroquim 5% Petroquim
16%
6% 6%
Petroquim
4%
Pet. Cuyo Pet. Cuyo
Propilco 5% 5%
Pet. Cuyo
14%
4% Propilven
Propilven 4%
Propilven Indelpro
4%
3% 22% Propilsur
0%

Quattor
25%

Braskem
B k
21% Suzano Pet.
Braskem
27%
31% Braskem
40%

2,650 kt/yr
, y 3, 85 t/y
3,485 kt/yr 3,835 kt/yr
t/y

Source: Polyolefins Consulting, LLC

Braskem incorporated Ipiranga and Quattor Indelpro
Quattor,
surpassed Propilco

Petrochemicals Multilatinas Becoming Global
P t h i l M ltil ti B i Gl b l
Alpek – Mexico
– The leading producer of PTA and polyester fibers in the
Americas and th second i PET only PP producer i M i
A i d the d in PET, l d in Mexico,
operates the largest expanded PS unit in the Americas
– Operates 20 plants in the Mexico, Argentina, and U.S.
Braskem – Brazil
– Largest thermoplastic resins producer in the Americas, eight
largest in the world, largest biopolymer producer
– Operates plants in Brazil, Germany, Mexico (2015) and U.S.
Mexichem – Mexico
– Produces vinyl chloride monomer (VCM); PVC in Mexico and
Colombia; compounds in Mexico, Colombia and U.S.; and PVC
pipe throughout LA and Europe
– Has 95 plants in 19 countries
Oxiteno – Brazil
– Largest producer of surfactants in Latin America
– “To be recognized as the best Surfactants and Specialty
To
Chemicals company in the Americas”
– Operates plants in Brazil, Mexico, U.S. (2013), Uruguay, and
Venezuela
Latin A
L ti American petrochemical companies are global
i t h i l i l b l
competitors

Alpek Mexico
Al k – M i
Alfa’s petrochemicals and
synthetic fib
th ti fibers business group
b i
Produces PTA, PET, PP, EPS,
caprolactam, urethanes,
gy
glycols, chemical specialties,
, p ,
polyester fibers and nylon
polymers
DAK – the leading producer of
PTA and polyester fibers in the
Americas and second in PET
– also operates the largest EPS
production site
Indelpro – only PP producer in
Mexico.
Plants in Mexico, Argentina and
U.S.
2011 revenues US$ 6.5 billion,
earnings US$ 577 million

Expanding organically and through acquisitions
E di i ll d th h i iti

Braskem – B il
B k Brazil
Largest resin producer in the
Americas
A i
– Building 1 million t/yr of C2 and
1 million t/yr of PE with IDESA in
Mexico
– Developing projects in Peru and
Venezuela
– Considering project in Bolivia
– Participating in COMPERJ
– Evaluating additional U.S.
acquisitions and expansions
– Producing “green” PE from sugar
green
cane ethanol
Plants in Brazil, U.S. and Germany
earnings US$ -280 million

C l b ti its 10th anniversary
Celebrating it i

Mexichem – M i
M i h Mexico
Most important chlorine, caustic
soda, PVC and pipe producer in
d d i d i
Latin America and Europe
Over last few years made
numerous acquisitions
q
– Bayshore Group (U.S.); Amanco
(Latin America); Petco
(Colombia); Geon Polimeros
Andinos (Colombia); Dripsa
(Argentina); Colpozos
(Colombia); Bidim (Brazil);
Comindustrias (Peru); Polycid
and Plasticos Rex (Mexico);
INEOS Fluor (U.S., Europe,
Asia); Plastisur (Peru);
AlphaGary (U.S., Canada, UK);
Wavin (Europe)
earnings US$ 194 million

Evaluating
E l ti JV with OxyChem to produce 500 kt/yr of C2 i
ith O Ch t d kt/ f in
Texas

Oxiteno – B il
O it Brazil
Is a leading manufacturer of
surfactants and specialty
chemicals operating
worldwide
Largest producer of
prod cer
surfactants in Latin America
Net revenue of US$ 1,438
billion in 2011
Plants in Brazil, Mexico,
Uruguay and Venezuela
2011 revenues US$ 1 31.3
billion, earnings US$ 83
million

Strengthening global presence with acquisitions in Brazil,
St th i l b l ith i iti i B il
Uruguay and U.S.

Brazil
B il
One of the best economic outlooks in the region
– The world s 6th largest economy
world’s
– Stable economy aided by
• Exports to China
• Petrobras pre-salt program success
– R
Rousseff administration maintains and projects confidence
ff d i i t ti i t i d j t fid

Petrobras
– Fourth largest public company in the Americas, after ExxonMobil,
Microsoft and Wal Mart
Wal-Mart
– Planning to be among the largest five integrated energy companies in
the world
– Pre salt reserves provide large increase of gas and oil offerings

Braskem
– Largest plastic resin producer in the Americas
– Planning to be among the largest five petrochemical companies in 2020

Largest producer of biopolymers
– Braskem and Dow-Mitsui build world scale plants

Able governmental political and diplomatic support
helps its business grow and seduce the world

Bolivia Industrializing Natural Gas
B li i – I d t i li i N t lG
YPFB accountable for
petrochemical projects
Carrasco
– Ammonia-urea plant awarded to
Samsung
• Will produce 650 kt/yr of
d kt/ f
ammonia and 726 kt/yr of Urea
• Start up by 4Q2015
Yacuiba
– Liquid Separation Plant awarded
to Técnicas Reunidas
• By 2021 will process 27.7
million m3/d of natural gas
before crossing border into
Argentina
• Start up by 2014
– Plan to award conceptual Source: CIA The World Factbook
engineering for 1050 kt/yr of C2
and PE by October 18, 2012
• Start up by 2016
Major
M j projects under way, some concern about natural
j t d b t t l
gas reserves and availability

Peru P t
P Petrochemical Complexes
h i lC l
Grupo Brescia (Peru) and Grupo
Sigdo Koppers (Chile)
– 800 kt/yr ammonia y 350 kt/r
ammonium nitrate at Pisco
– US$ 650 million
– Project under way
CF Industries (U.S.)
– 1 million t/yr urea at San Juan de
Marcona, Ica
– US$ 1 billi
billion
– Orica Mining (Australia) with
ammonium nitrate
– On hold
Braskem, Petrobras and PetroPeru
– 1,200 kt/yr ethylene and PE by 2018
at Ilo
– Requires over 40 million m3 natural Source: CIA The World Factbook
gas to be viable and 1000 km duct
from Camisea to the South

Successive administrations – Fujimori Toledo, Garcia
Fujimori, Toledo
and Humala – promoted petrochemical projects

Venezuela - Th Petrochemical Revolution
V l The P t h i lR l ti
Jose project delayed to
– Match expected sales upswing by 2014
– Have better access to financing
– Negotiate reduction in process equipment and contractor costs
PP plant will be built in Paraguaná
– Propylene availability reduces investment from US$ 1200 to 500 million
Reconsidering PE plans
Some uncertainty regarding natural gas availability

Source: Pequiven
Reconsidered Jose PE projects, potential move to Paraguaná,
projects Paraguaná
capacity increases in U.S. reduce attractive

Mexico
M i
Continuously decreasing oil production and revenue

Large resin importer, specially PE
– Installed PE capacity in 2010 is 1.078 million t/yr
– Importing approximately 600 kt
– Estimate that by 2015 Mexico will require 1.9 million t/yr PE

Etileno XXI - IDESA and Braskem
– PPemex Gas will provide 66 thousand b/d of ethane
G ill id th d f th
– Cracker for 1,05 million t/yr of ethylene
– Two 375 kt/yr MDPE/HDPE each, and 300 kt/yr LDPE/EVA
– Start up in 2015

Market even more anxious for new capacity while
capacity,
processors continue losing ground against imports

Other
Oth countries
ti
Argentina

Ecuador

Colombia

Cuba

Trinidad and Tobago


Southern Cone Shale Gas Potential
S th C Sh l G P t ti l
Technically
Risked Gas
Recoverable
Country In Place
Resource
TCF
TCF

Argentina 2732 774

Bolivia 192 48

Brasil 906 226

Chile 287 64

Paraguay 249 62

Uruguay 83 21

TOTAL 4440 1195
TCF – trillion cubic feet Source: EIA – World Shale Gas Resources

Another ift f
A th gift from nature to be extracted promoting general
t t b t t d ti l
welfare y and with great respect with the environment

Polyolefins Chain in Latin America
Strength and Proportion
1st Generation
Oil and 2nd Generation 3rd Generation End users and
Country Ethylene
y
gas PE - PP Processors
P markets
k t
Propylene

Argentina

Brazil

Chile

Peru

Colombia

Venezuela
Trinidad &
Tobago
Mexico
Arrow thickness represents relative strength Source: Gas Energy, Polyolefins Consulting
Energy

Countries have very obvious needs and more hidden ones

Polyolefins R
P l l fi Raw Materials Availability
M t i l A il bilit
Argentina Brazil Chile Bolivia Peru Colombia Venezuela Trinidad & Central Mexico
Tobago America

Resources
Oil -
Nat. gas -
B i petrochemicals – 1st generation
Basic t h i l ti High
Ethylene - - - - Medium
Low
Propylene - - - - Very low
- None
C4 - - - - - - - - No data

C6 - - - - - - - - - -
C8 - - - - - - - - - -
VA - - - - - - - - -
Catalysts - - - - - - - - -
Co catalysts
y - - - - - - - - - -
Additives

Source: Polyolefins Consulting

Should dd l t
Sh ld add value to extracted raw materials
t t d t i l

Polyolefins A il bilit
P l l fi Availability and Processing
dP i
Argentina Brazil Chile Bolivia Peru Colombia Venezuela Trinidad & Central Mexico
Tobago America

Resins – 2nd generation
PE - - - -
EVA - - - - - - - - -
Acrylate cop. - - - - - - - - - - High
Medium
PP - - - - Low

Machinery Very low
manufacturing - None
No data
Processing
Compounding

Market size
End users
Recycling

Waste mgmt.
mgmt

Source: Polyolefins Consulting

There are business opportunities in all countries
Th b i t iti i ll ti

Some R i
S Regional Petrochemical Offerings
lP t h i l Off i
Chemicals Raw materials
– Commodity – Biodiesel
• Ethylene oxide – Ethanol
• Monoethylene g y
y glycol – From Argentina and Brazil
g
– Specialty
• Surfactants
• Softeners
• Dispersants
• Emulsifiers
• Hydraulic fluids
• Leather chemicals
– From Brazil. Mexico,
Venezuela and Uruguay

for h i l
f chemicals and raw materials …
d t i l

Some R i
lP t h i l Off i
Polymers Additives
– Commodity – Calcium stearate, zinc
• PE, PP, PET, PVC stearate, magnesium
– Specialty
p y stearate, potassium
stearate
• UHMWPE
– Phthalic Anhydride
• Bio PE and PP
– Plasticizers & Auxiliaries
– Braskem Dow, others
Braskem, Dow
– From Brazil and Argentina – Corporacion Sierra Madre
(Mexico)
– Varteco Quimica Puntana
(Argentina)

for l
f polymers and additives …
d dditi

Some R i
lP t h i l Off i
Machinery
– Plastics processing
• Blown film extrusion lines
• Flexographic p
g p printers
• MD orientation machines
• Flexible plastic recycling lines
• Sheet extrusion lines
• Screen changer, gear pump, circular and flat dies
• Nip roll and winders
• Carnevalli Rulli Standard, Rodofeli
Carnevalli, Standard
• From Brazil and Argentina

– E i
Equipment f process industries
t for i d ti
• IMPSA Process, Tenaris

for
f machinery …
hi

Latin America Petrochemical and Polymers Outlook 9-13-12

Latin America Petrochemical and Polymers Outlook 9-13-12

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