Brazil's Petrobras Signs $17.8 Billion Feedstock Deals with Braskem

Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)

Summary

Petrobras and Braskem ink feedstock supply details, with ethane volumes taking central stage as Braskem switches to gas.

Long-Term Supply Agreements

Petrobras has signed long-term agreements to supply Braskem operations with feedstock with an estimated value of US$17.84 billion over the next few years. The deals were agreed prior to the expiration of current contracts.

The first agreement will take effect on January 1 next year and last for five years. It consists of the supply of naphtha to Braskem's plants in the São Paulo, Bahia and Rio Grande do Sul states, with volumes up to 4.1 million tons in 2026 and up to 4.3 million tons in 2030, for a deal worth US$11.3 billion.

More importantly, Petrobras will also supply ethane, propane, and hydrogen from its Duque de Caxias and/or Boaventura complex to Braskem's Rio de Janeiro complex. Between 2026 and 2028, the feedstock will total 580,000 tons of ethylene equivalent per year, increasing to 725,000 tons of ethylene equivalent per year from 2029 to 2036. The contract will extend for 11 years, 2026 to 2036, and has an estimated value of US$5.6 billion.

The increase in volumes from 2029 relates to Braskem's "switch to gas" policy. The company highlighted that it will maximize the use of gas as a feedstock to increase efficiency and competitiveness.

Braskem's deals with Petrobras add weight to the shift to gas-based feedstock. New gas production from countries such as the United States, Qatar and Argentina is providing alternatives for petrochemicals. Although it is not as flexible as naphtha, ethane is significantly cheaper.

As a result, Braskem announced investments of 4.2 billion reais (US$759 million) to increase its Duque de Caxias petrochemical complex in Rio de Janeiro by 220,000 tons of ethylene. The upgrade is expected to be completed by the end of 2028 and is the driver for the increase starting in 2029. Subscribers to Industrial Info's Global Market Intelligence (GMI) Chemical Processing Project Database can access a list of detailed project reports involving Braskem's Duque de Caxias Petrochemical complex.

The third contract entails the sale of propylene for a period of five years starting May 18, 2026, and is worth US$940 million. Petrobras' RECAP Refinery will supply some 140,000 tons, another 100,000 tons will come from the Duque de Caxias Refinery, while the Alberto Pasqualini refinery will supply scaled-up volumes, going from 14,000 tons to 60,000 tons per year.

IIR is tracking 21 Braskem chemical plants and two terminals across Brazil.

The petrochemical market remains fragile, partly due to Chinese petrochemical growth and a weaker construction sector in China, a key driver of petrochemical demand.

• Petrobras will supply volumes up to 4.1 million tons of naphtha in 2026 and up to 4.3 million tons in 2030.
• Ethane supply will jump from 580,000 tons through 2028 to 725,000 tons after 2029.
• A third contract includes the supply of propylene for five years.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).