Bolivia's state oil company YPFB is preparing to build an ethylene and polyethylene plant, part of a $4.2 billion project to industrialize its rising natural gas output, a senior government official said.
The company last week called bidding for a contract to develop a conceptual engineering study of the facility, YPFB executive president Carlos Villegas Quiroga said late Wednesday at the Argentina Oil & Gas Expo in Buenos Aires.
The $2.3 billion plant, likely to be built the gas-rich southeastern department of Tarija, will have capacity to produce 600,000 mt/year of PE as soon as 2014. The plant will consume 2 million cu m/d of gas feedstock.
It will receive gas from a 33 million-34 million cu m/d separation plant now under construction in Rio Grande, Santa Cruz, he said.
"We want to increase gas production in fields to make it possible to industrialize the gas in Bolivia," Villegas said.
The project is part of an effort to build a domestic market for gas, helping to reduce consumption of imported diesel and other liquids. This would create more sales opportunities to encourage producers to step up production of gas in a country with 54 Tcf of conventional gas reserves, the second largest in South America after Venezuela. Producers have not been able to boost production in part because of limited sales opportunities.
Bolivia produced an average of 40 million cu m/d between 2006 and 2010, rising to a peak of 48 million cu m/d this year thanks to the startup of a pipeline to deliver more supplies to Argentina. Its southern neighbor is importing 9 million-10 million cu m/d this year, up from 5 million last year.
EXPANDING GAS DISTRIBUTION
Argentina plans to increase imports to 11-13 million cu m/d in 2012 and 27.7 million cu m/d by 2017, while Brazil, the only other export market for Bolivia, plans to maintain imports at 30 million cu m/d.
Villegas said YPFB and private companies plan to invest $10.7 billion through 2015 to boost gas production to 80 million cu m/d by 2014-15 to feed the export markets.
It also is expanding gas distribution networks, building separation plants and prepping petrochemical projects to make a domestic market for the gas. Local consumption is now around 6 million cu m/d.
"We will use ethane from a gas separation plant as a raw material for ethylene," Villegas said.
YPFB also plans this month to launch an auction for detailed engineering plans for a $1 billion ammonia and urea plant set to start operations as soon as 2014. The facility will process 2 million cu m/d gas to produce 600,000 mt/year of ammonia and 726,000 mt/year of urea as fertilizers for domestic consumption and export to Brazil.
