Could you update our audience on the recent performance of the industry?

The industry’s output increased by 13% between 2021 and 2022, and local sales grew by 29%, marking a higher performance compared to the year before. Meanwhile, the petrochemical trade declined by 12% volume-wise as a result of import restrictions. Though the volume of imported goods is lower, the value is 29% bigger due to higher international prices. On the export side, volumes were slightly lower by 4%, but values went up by 35%, again reflecting higher prices. Argentina’s petrochemical trade balance is negative, at minus US$8.5 billion, a 26% increase versus 2021. Nevertheless, this number is significantly lower compared to neighboring countries like Brazil. What is helping the Argentinian industry is that we export many plastics, taking advantage of the surpluses of polymer production in Bahia Blanca, as well as a range of performance materials associated with higher values. In 2023, international sales went down dramatically compared to 2022, with most of the imported materials going into the production of end-use products for the local market. Could you elaborate on the mechanisms introduced to restrict imports?

Known as the “Import System of the Argentine Republic” (SIRA), the system was introduced about a year ago when funds at the central bank became scarce. To be able to import, players need to open a file through the SIRA system and wait for approval, which, if granted, comes in the next 24-48 hours. The approval also comes with prescribed terms of payment, which in many cases are different from those closed with suppliers. What are the low-hanging fruits in the petrochemical industry that could be developed from gas-based feedstocks?

The most promising one is in urea. Currently, Argentina has a large urea plant belonging to Profertil, but the country’s demand for urea is 1.8 times higher than what Profertil’s plant can produce. Next door, Brazil is one of the largest urea importers in the world, with about 7 million t/y of urea imports.

There is a project to build a urea plant in Argentina led by Profertil. Domestic natural gas price is very competitive in the region.

The other good news is that the content of natural gas liquids (NGL-s) from Argentina’s non-conventional sources is three times higher compared to conventional ones, similar to what we see in the US. The high ethane and propane content triggers opportunities in petrochemical-based projects.

Finally, a great opportunity is the development of lithium resources, with Argentina holding the second or third largest lithium resources in the world. The production of lithium carbonate requires many inorganic chemicals (like sodium carbonate, hydrochloric acid, sulfuric acid) that Argentina produces. What is the outlook for oil production in the country?

Argentina has three projects to evacuate non-conventional oil production: One is a pipe connecting Neuquen with Chile’s Enap refinery; the pipe is now only exporting 50,000 bpd, but it is due to reach 110,000 bpd. The second one is operated by Oleoductos del Valle (Oldelval), evacuating oil from Neuquen to Bahia Blanca at a capacity of 220,000 bpd, but due to almost double to 400,000 bpd. Finally, the third project is Vaca Muerta South, by YPF, projected to transport 250,000 bpd. Altogether, we are looking at over 1 million bpd in the next two to three years. What are the main agenda items at CIQyP this year?

Just like the rest of the petrochemical industry globally, there are two main issues we need to address: climate change and the circular economy. To address circularity, CIQyP is working closely with the plastics leadership group within ICCA (International Council of Chemical Associations)s. As a member of the UN, Argentina is participating in INC 1,2, and 3 – these are the Intergovernmental Negotiating Committee to develop an international legally binding instrument on plastic pollution.

So far, Argentina does not have domestic laws to promote or regulate recycling, but there are ongoing discussions around a packaging law and extended producer responsibility regulation, looking particularly at how best to include the informal sector of waste collectors into the formal value chain.