Report: Shale gas renaissance reshaping Latin America – News – Plastics News

HOUSTON — The North American petrochemical renaissance, driven by low-cost shale feedstocks, is reshaping the Latin American petrochemical industry, including investments and projects in Brazil, Mexico, and other countries in the region, according to IHS Chemical.

“This is a critical time of change and opportunity for the Latin American petrochemical industry,” said Rina Quijada, senior director, Latin America, for IHS Chemical, in a news release. “On one hand, we have steady economic growth in the region, which is driving demand for chemicals and finished goods, and at the same time, we have significant surplus chemical capacity coming from North American producers, who are now viewing Latin America as a long-term strategic partner.”

According to IHS economic analysis, Latin American GDP performance is expected to slightly outpace global GDP growth by 2018, with Brazil accounting for 40 percent of the region’s total GDP growth.

To meet increased regional consumer demand, competitively priced finished products will be produced by sourcing resins from low-cost sites in North America and convert them into plastics and other high-value chemicals, Quijada said.

Prior to the North American shale energy revolution, numerous petrochemical projects were planned in Latin America that were naphtha based, but all those plans are now under reevaluation, according to IHS.

“The U.S. has announced approximately 10 million metric tons of ethane based ethylene capacity,” Quijada said. “That is significant capacity expansion, and since their production will exceed domestic demand, they will have to export excess production. Latin America represents an attractive export option, due to geography, economics, demand, and attractive netback for North American producers.”

IHS will address these developments at the Latin American Petrochemicals and Polymers Conference and industry workshop, scheduled for Sept. 10-12 in São Paulo.

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