MOSCOW (MRC) -- Braskem expects costs to rise for a petrochemical project on Peru's south coast, said Bnamericas, citing the company's country manager said.
The 1Mt/y polyethylene plant, originally calculated to cost USD3.5bn, may now require as much as USD5bn in project financing as potential locations such as the southern port of Matarani lack infrastructure, qualified personnel and services, Braskem's Jaime Quipusco told BNamericas.
Sao Paulo-based Braskem, which in 2011 signed an MOU for the project with Peru's state oil company, Petroperu, is waiting for the government to decide on a location for a petrochemical cluster, Quipusco said in an interview on the sidelines of an energy event in Lima.
Braskem, which needs 65,000b/d of ethane, has also yet to line up an ethane supply contract from Camisea gas fields operator Pluspetrol, Quipusco added. Once a port has been chosen, the company would take two years to carry out studies and four years to build a plant similar to its USD4.5bn Etileno XXI facility currently under construction in Veracruz, Mexico, he said. Companies exploring around the Camisea fields in the Ucayali basin may also increase natural gas resources, currently calculated at 16.7Tf3 (473Bm3), he said.
"The cost of ethane, low natural gas prices and the fact the government is in its last year are all factors to be taken into account," Quipusco said. "If we take the decision today, the situation could improve in six years' time."
Peru, which aims to corner 50% of the total polyethylene resin market in South America, last year awarded a USD3.6bn natural gas pipeline to link Camisea to the south coast. But delays in guaranteeing gas supplies has set back petrochemical projects proposed by CF Industries, Orica and Chile's Sigdo Koppers.
President Ollanta Humala said last week his government was still aiming to obtain commitments for a petrochemical cluster before he steps down in July 2016 following April general elections.
As MRC informed before, Braskem announced its plans for the construction of an Ultra High Molecular Weight Polyethylene (UHMWPE) plant at its site in La Porte, Texas.
Braskem is Brazilian main producer of polyethylene and polypropylene. In addition with ongoing plants located in both petrochemical complexes, in April 2008 Braskem opened a 300,000 metric ton polypropylene plant in the city of Paulinia (Sao Paulo).
MRC