News Post
Interview: Brazil’s Braskem eyes new NGL options
Hardi Schuck, who will deliver a presentation and host a Q&A session at this week's event regarding LPG and naphtha demand dynamics in Brazil, explained what his company is searching for within the context of new NGL export and import opportunities.
A transcript of his Q&A can be read below:
Q: Why are NGL feedstock and the global export opportunities so important in the industry right now?
A: In the past, NGLs were basically produced to supply the domestic market in the US. Export capacity was limited and US prices were higher than other alternatives in the international market.
Since the development of shale gas, NGL production has increased and new opportunities came to the market. There is more product availability and US prices became more competitive.
In this new market reality, players are searching to find the best market opportunities and in some cases the international market shows better alternatives for producers.
Q:
What are the main plant projects that you are currently working on at this time in Latin America? Can you give a brief description?
A: Braskem has a joint venture with Idesa in Mexico; an ethane cracker and polyethylene units. The startup is going to happen in the first quarter of this year. The Braskem Idesa
project is a 1 MMtpy ethylene-capacity cracker based on ethane produced in Mexico.
Q: What are the main considerations on selecting a country to export goods to?
A: The main considerations to select a destination are competitive commercial conditions and logistics infrastructure.
Q:
What are the key logistical challenges when exporting feedstock to Brazil or Mexico?
A: Brazil is short in all NGLs: ethane, propane, butane, natural gasoline and heavy condensates; there are different restrictions for each product. For ethane, the main challenge is to move cryogenic material and the infrastructure associated. For LPG, logistics are more developed. To move the material heavier than C5 (natural gasoline and condensate) the challenges are arbitrage opportunities and competitive freight rates.
Q: What are you most looking forward to at the Global NGL Feedstock and Derivatives conference?
A: Networking with players from the NGL sector and understanding US export availabilities and constraints.
Q: What are the implications of seasonal demand variables on the capacity of naphtha?
A: Seasonal demand of naphtha for gasoline can change the relative feedstock competitiveness. This is the reason why crackers with flexibility to choose the raw material have a competitive differential.
Q: Is there an opportunity to export either naphtha, ethane, propane or butane to Brazil, and if so, why?
A: As Brazil is short in all NGLs, there are different logistic restrictions for each product. Nowadays, the US already exports propane, butane and natural gasoline to Brazil. There is the possibility to increase exports of C5+ (natural gasoline and condensate), as Brazil will continue to be short in naphtha.
Q: Which region are you mostly looking to import the majority of your naphtha and propane from?
A: The main naphtha supply to the Brazilian market comes from the Mediterranean. The US is becoming more important as a supplier due to shale gas developments.
Q:
Almost all of the major petrochemical and productions companies are involved in large-scale global export of feedstock, but what would you say to smaller companies that are considering export opportunities?
A: There are opportunities to all the players in the market. For the smaller producers logistics are even more important. These producers need to find a way to consolidate parcels in order to optimize the logistics. Some end users have
projects to consolidate parcels in the US in order to have the right size to export.
To export C5+, producers with parcels smaller than 300,000 bbl have a big challenge to be competitive.
For subscriptions or a demo:
Sam Hassaniyeh
Subscription Executive
Phone: +44 203 4092242
For questions or to give feedback:
Thad Pittman
Senior Researcher
Phone: +1 (713) 525-4605
Download our brochure today!
Project News