Columbia's Ecopetrol to invest US$2.9B in Barrancabermeja refinery, US$1.3B in Cartagena refinery, for upgrades, expansion likely to benefit downstream petrochemical industry by providing greater access to naphtha feedstock, market researcher says

DUBLIN , November 25, 2011 (press release) – Research and Markets (http://www.researchandmarkets.com/research/49ecba/colombia_petrochem) has announced the addition of the "Colombia Petrochemicals Report 2012" report to their offering.

Business Monitor International's Colombia Petrochemicals Report provides industry professionals and strategists, corporate analysts, petrochemical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Colombia's petrochemicals industry.

Strong economic growth will continue to support the Colombian petrochemicals market. Coupled with the feedstock potential offered by refinery expansion, this could prompt further investment in capacity, according to BMI's latest Colombia Petrochemicals Report.

The Colombian petrochemicals market experienced healthy growth in 2011 across a broad range of products. In H111, market fundamentals helped boost local PVC prices. The raising of PVC import tariffs from 5% to 10% also helped drive prices upwards, increasing margins for local producer Mexichem Resinas Colombia (MRC), which represents 90% of the domestic market as well as exporting 60% of its output. Ecopetrol subsidiary Propilco reported in September 2011 that its PP sales were running at 430,000-450,000tpa, indicating that capacity utilization was at 86-90%. PS supply was disrupted by outages and a truckers strike in Q111, but the tightening of the domestic market was only temporary.

The Colombian government is currently in the middle of a refinery expansion programme, hoping to turn a small oil products import requirement into an equally small export flow. It opens up opportunities for increasing naphtha feedstock availability for the downstream petrochemicals industry. Ecopetrol's 2011- 2020 Strategic Plan includes plans to carry out upgrades and expansions at both its major refineries. The company plans to invest US$2.9bn in the Barrancabermeja refinery and US$1.3bn in Cartagena.

In 2011 Colombia's petrochemicals facilities included capacities of 120,000tpa ethylene, 45,000tpa benzene, 20,000tpa toluene, 35,000tpa xylenes, 45,000tpa PET, 60,000tpa LDPE, 103,000tpa PS, 400,000tpa PVC, 455,000tpa PP, 115,000tpa ammonia and 185,000tpa urea. These capacities are unlikely to change over the next five years, unless Ecopetrol's plans come to fruition within this time.

Companies Mentioned:

Empresa Colombiana de Petroleos (Ecopetrol)
Mexichem Resinas Colombia (MRC)
Petroqumica Colombiana (Petco)
Polipropileno del Caribe (Propilco)

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