Dow Chemical's steam crackers in Argentina will undergo a one-month maintenance in the second or third quarter of 2018, a company source said Monday on the sidelines of the Latin American Petrochemical Meeting in Rio de Janeiro.
The maintenance is part of Dow's plan to invest more than $200 million in Argentina from 2018-19, the source said.
The investment is tied to Argentina's natural gas supplies increasing recently and in coming years via the Vaca Muerta shale play, company officials have said previously.
Dow is a partner in El Orejano, a block producing 3.5 million cu m/d of gas from Vaca Muerta, equivalent to nearly 3% of the country's 122 million cu m/d of total production.
In addition to Dow's El Orejano partnership, the company operates two gas-fed steam crackers for the production of monomer ethylene with a total annual capacity of 765,000 mt and high-density, low-density and linear low-density polyethylene plants with a combined production capacity of approximately 650,000 mt/year at its Bahia Blanca petrochemical complex.
Dow will also suspend all PE production at Bahia Blanca during the maintenance to undergo debottlenecking that will result in a minimal capacity addition for both the crackers and PE lines, the source said.
Plans for further expansion -- including possibly building another steam cracker and additional PE production -- is still being considered by Dow, the source said, adding Bahia Blanca has been running at full rates in recent months.
The Argentinean government typically restricts ethane gas supplies during the region's winter months of June through August, shifting from industrial availability to consumption for heating and other residential uses.
After more than a decade of ethane and LPG supply availability being seasonally restricted for petrochemical producers and other industrial users, Dow has seen the situation improve in 2017.
"This year, after many years, was the first without raw material curtailments which is a clear sign that Argentina energy system is recovering," the source said.
Vaca Muerta boasts some 300 Tcf of gas resources, which only recently have begun translating into significant in production.
Argentina's shale and gas production increased to 27.7 million cu m/d in December 2016 from 21 million cu m/d a year earlier and 14.4 million cu m/d in December 2014, according to Hub Energia, a consulting firm.
"El Orejano is the most productive shale gas field in the world outside North America," Gaston Remy, president of Dow South Region Latin America, said earlier this year at the time of the investment announcement with Argentinian President Mauricio Macri.
"El Orejano has reached this production level after only two years of development."
