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Argentina petrochemical sector lost $100 million to energy cuts
By Charles Newberry
Platts
Buenos Aires
Petroleumworld.com 06 29 07
Argentina's chemical and petrochemical producers lost $100 million in
sales as energy cuts over the past month slowed production, an industry
representative told Platts, Thursday.Natural gas and power shortages reduced production by 150,000mt during
an unseasonably cold period of May 28 and June 22, said Jose Maria Fumagalli,
the executive director of Argentina's Chemical and Petrochemical Industry
Association (CIQyP). The country produces around 7 million mt/year of
petrochemicals, according to the Argentine Petrochemical Association.Fumagalli said production is reviving this week as "energy supply slowly
recovers." Warmer weather this week eased heating demand for gas, freeing up
supply for industry.On Wednesday, gas distributors in metropolitan Buenos Aires restored
deliveries to industrial users. Also, some petrochemical companies like
ammonia and urea maker Profertil that buy gas directly from producers, saw an
increase in supply.The country is running an estimated deficit of 2,000 MW of power and 40
million cu m/d of gas on cold days, a result of demand rising faster than
production. Price controls, 25-45% export taxes and shaky regulations have
deterred spending in oil and gas exploration, building power plants and adding
refining capacity since 2002. The production of gas, which provides 55% of the
country's energy needs and is a feedstock for key petrochemicals, has remained
at 140-142 million cu m/d since 2005, down from a record 143 million cu m/d in
2004 even though demand has been growing at an annual 5-10% over the same
period."We hope the shortages won't be repeated, but this depends on investments
to add supply," Fumagalli said. "With private energy investment lagging, the
government is spearheading a drive to build power plants and gas lines,
including a project to step up gas imports from Bolivia to 27.7 million cu m/d
from a current 7.7 million. However, fresh supply was not slated to come on
line until at least the middle of next year.--Charles Newberry, newsdesk@platts.com
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Platts 28 06 07
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