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Bolivia licenses U.S. company for petrochemical plant
By Alex Emery
Bloomberg News
LIMA
Petroleumworld.com 03 30 06Bolivia granted a license to The Austin Powder Co., a Cleveland-based industrial explosives manufacturer, to build and operate the country's first petrochemical plant.
The plant, which will cost $30 million to develop, is slated to start producing ammonium nitrate in the eastern part of the country in the first half of 2008, Hydrocarbon Superintendent Hugo de la Fuente said in a statement on the presidential Web site. The statement provided no details of the structure of the licensing arrangement.
The project follows campaign pledges by President Evo Morales to limit exports of Bolivia's natural gas reserves, South America's second-largest, in favor of spurring a petrochemical industry to create jobs. Morales brought down President Gonzalo Sanchez de Lozada's government in 2003 with protests against a planned $5 billion pipeline to export gas through Chile. The plan was canceled after 70 people died in the unrest.
``It'll be good news if it really happens,'' Bolivian Hydrocarbon Chamber spokesman Ronald Fessy said in a phone interview from La Paz. ``Most companies are holding off on investments until the government provides more details on its new energy policies.''
Austin Powder Co. spokeswoman Michael Gleason didn't return calls seeking comment. The company, which manufactures industrial explosives, explores for natural gas and operates gold, zinc and copper mines, operates in the U.S., Bulgaria and nine countries in Latin America, according to its Web site.
Relations between the U.S. and Bolivia have been strained since Morales, 46, a coca farmer and Indian activist, assumed the presidency in January, pledging to become the ``United States' worst nightmare'' by raising taxes on oil companies and legalizing coca, the basis of cocaine.
International Investment
Morales won the December 2005 elections on a pledge to make the state a partner in energy projects, raise taxes on oil and gas production and rewrite 72 contracts with international oil companies.
Investment by international energy companies in Bolivia's gas industry fell off as it appeared likely Morales would win the presidency, declining to $135 million last year from $236 million in 2004, according to the Bolivian Hydrocarbon Association.
The plant, which will use 2 million cubic feet a day of natural gas, is expected to $17 million in annual sales from production of 200 metric tons a day of ammonium nitrate, nitric acid and ammonia to make soybean fertilizers, the statement said.
Alex Emery, aemery1@bloomberg.netL
Bloomberg News 29 03 06Copyright © 2006 Bloomberg. All Rights Reserved.
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