Interviews with IPA and with CIQyP
Gabriel Rodríguez Garrido Executive Director
ARGENTINE PETROCHEMICAL INSTITUTE (IPA)
How would you characterize Argentina’s petrochemical industry?
I believe oil represents the most immediate opportunity for Argentina, offering a simple pathway from extraction to export. However, we must look ahead. ‘Tomorrow’ it will be natural gas, primarily methane, with the country preparing for major exports starting 2027. ‘The day after tomorrow,’ it will be petrochemicals. Processing oil and gas yields vital petrochemical feedstocks.
What has held back Argentina’s petrochemical competitiveness?
Argentina’s petrochemical industry operated largely within a closed market despite Mercosur. This shaped a sector focused more on local supply than global competitiveness. Today, with economic opening underway, a new chapter begins.
Has the RIGI investment incentive regime benefited Argentina’s petrochemical sector?
Fertilizers are an initial step, with projects underway by companies like Profertil and Pampa Energía. These make sense but require multi-billion-dollar investments, where frameworks like RIGI play a vital enabling role.
In a period of rapid change in Argentina’s economy, how is the petrochemical industry adapting?
The priority remains improving competitiveness to avoid plant closures. Recent closures were driven by global strategies of multinational firms, with many reflecting local structural limitations.
We are seeing promising signs: a major expansion by a leading gas processor and petrochemical supplier is underway. The next wave will require stable rules, reliable access to infrastructure, and the development of skilled human capital.
How is IPA working to enhance Argentina’s petrochemical industry development?
We host flagship industry events. We offer a respected Diploma in Petrochemical Business with Universidad Austral. Finally, we publish Argentina’s authoritative petrochemical yearbook – now in its 45th edition.
Jorge de Zavaleta Executive Director
ARGENTINE CHAMBER OF THE CHEMICAL AND PETROCHEMICAL INDUSTRY (CIQYP)
Which are the sector’s advantages in Argentina, and which of its products have been more in demand?
The sector’s main advantage lies in the scale of its development. Petrochemistry has been active in Argentina since 1942, providing a long-standing foundation that has allowed for robust growth in both chemistry and petrochemistry. The availability of low-cost gas from Vaca Muerta has further strengthened the competitiveness of production, positively impacting the entire value chain, an advantage not widely shared across the region.
How has the Large Investment Incentive Regime (RIGI) impacted the sector?
The RIGI has been a key instrument in attracting investment to critical sectors. It provides clear rules regarding taxation and introduces lower tax rates to promote long-term investment. Although no chemical project has yet qualified under RIGI, certain projects, such as those related to urea production, may become eligible. Compañía MEGA is also advancing a notable project focused on LNG fractionation, and many more investments are expected to follow.
How is the sector in Argentina adapting to the supply chain disruption caused by the geopolitical tensions?
This is a particularly difficult period for the sector. Whereas previous sector crises typically lasted around 24 months, the current downturn has persisted for three years and continues to have a profound impact. Most consultancy firms now forecast a recovery only beginning in 2027 for many chemical and petrochemical subsectors.
Nevertheless, Argentina has a competitive advantage thanks to abundant natural gas from Vaca Muerta. The associated gas, plus production from the wet gas window, has a high natural liquid content that could support investments in petrochemicals. Coupled with an increasing number of LNG projects and a correspondingly low gas cost, this creates a strong opportunity for nearshoring, particularly for regional partners who lack access to similarly competitive energy prices.