2009-11-25 15:19:03 -
Colombia Petrochemicals Report 2010 - a new market research report on companiesandmarkets.com www.companiesandmarkets.com/Summary-Market-Report/colombia-petro ..
Colombia is set to witness growth in its olefins, polyethylene and polypropylene capacities over the next five years as it makes use of growth in gas and oil production, but the country will still remain a minor player on the world market, according to the latest Colombia Petrochemicals Report.
In 2009, Colombias petrochemicals facilities included capacities of 120,000tpa ethylene, 45,000 tonnes
per annum (tpa) benzene, 20,000tpa toluene, 35,000tpa xylenes, 45,000tpa PET, 60,000tpa LDPE, 103,000tpa PS, 400,000tpa PVC, 455,000tpa PP, 115,000tpa ammonia and 185,000tpa urea.
Under President Alvaro Uribe Velez, the petrochemicals industry is undergoing gradual liberalization.
National oil company Ecopetrol, which operates most of the countrys petrochemicals capacities, is undergoing a process of divestment which will be carried out over the period to 2014, with proposals emerging in Q309 for the privatization of a 10% tranche. It is believed the privatisation of Ecopetrol is good news for the Colombian energy industry. On the back of a revamped business-friendly framework, Ecopetrol has transformed itself into one of the most efficient national producers in the region. While Colombian output growth potential is limited, we expect Ecopetrol to play a bigger role in the region over the next decade.
At the same time, the Colombian polyethylene market is opening up to competition with the lowering of import tariffs; in 2009, LDPE was zero-rated and LLDPE and HDPE had a tariff of 5%. The plan to eliminate LDPE tariffs has generated criticism as Ecopetrol already produces it, although well below the requirements of the Colombian market. At the same time, Colombia does not produce LLDPE and HDPE.
Although this appears to go against the objective of enhancing the countrys petrochemicals industry, the measure will is discouraging substitution of LDPE, thereby stimulating the market for this product ahead of expansion in the domestic industry. The government has said it will review LDPE tariffs in 2012, when Ecopetrol expects to increase production to satisfy domestic demand.
The future of the Colombian petrochemicals industry will be determined by access to feedstock. Refinery capacity is set to reach 390,000b/d by 2013 from 300,000b/d in 2009 with the refineries at Cartegena and Barrancabermeja, both owned and operated by national oil firm Ecopetrol, undergoing significant expansions under the firm´s guidance. The programme of expansion offers a great deal of potential for further expansion downstream, particularly in the propylene-PP chain, by providing for an increase in naphtha supply. Meanwhile, we are forecasting domestic gas production and consumption to reach 11bcm by 2013, providing a significant source of ethane feedstock for downstream petrochemicals industries.
Vertical integration would also improve the possibilities of expansion. Ecopetrols acquisition of Propilco in 2008, has significantly enhanced Ecopetrols involvement in the petrochemical sector. The acquisition of Proplico will create synergies with its oil operations, with the potential for further expansion.
Propilcos expansion programme has seen one of the companys two PP plants increasing capacity from 180,000tpa to 205,000tpa in 2008, with a second expansion due to be completed in Q210, with capacity increasing to 250,000tpa. In Q209, the expansion of its other PP plant was completed, raising its capacity from 200,000tpa to 250,000tpa.
Meanwhile, Ecopetrol intends to increase LDPE capacity to achieve national self-sufficiency in the product by 2012, however the company has not provided details on its plans. The Compania Promotora de Olefinas y Aromaticos del Caribe has been charged with the goal of developing new facilities at Cartagena propylene, ethylene and benzene. Completion is scheduled for 2013, but BMI cautions that it could take a further year to complete due to slow progress. Additional capacities include 600,000tpa of ethylene, 100,000tpa of benzene, 450,000tpa of LLDPE and 345,000tpa of propylene.
