Released April 24, 2020 | SUGAR LAND
en
Power
The Latin American region's Power Industry remains stable. Industrial Info has identified 245 projects in Latin America that have been affected by the pandemic, but there have been no cancellations to date.
Pharmaceuticals
The most promising drugs for COVID-19 that are undergoing clinical trials belong to a few giant pharmaceutical companies: Abbvie, Gilead and Toyama Chemicals. Recently, Abbvie voluntarily cancelled its patenting of medicines that are being tested for COVID-19 treatment; if these trials are successful, other pharmaceutical and biotech laboratories also could produce them as well. These drugs could be produced at least in Mexico, Peru and Chile, as those countries already have the technology in place. Argentina, Colombia and Uruguay could be included on the list once the patent is ready.
In Brazil, ANVISA, the national agency for health surveillance, authorized 39 rapid test kits produced and/or distributed by international and Brazilian companies. Brazilian company Vent-Logos Sistemas Logicos will expand its respirator-production capacity at its plant in Vitoria, Espirito Santo. The project is expected to be completed by the fourth quarter.
In Cuba, Centro de Ingenieria Genetica y Biotecnologia will add a processing line of injectable interferon vaccines that could be ready by August. These types of proteins have shown some success in treating patients with COVID-19.
Food & Beverage -- Pulp & Paper
The Food & Beverage and Pulp & Paper industries remain active and operational; however, in South America and Mexico, sectors which rely heavily on exports such as poultry and meat, agricultural processing and pulp already are suffering from slowing demand. This has led companies to reduce production or shut down some plants and production units.
The paperboard, carton board and package-converting sectors are operating at their designed capacities, and are facing extremely high market demand for packaging for pharmaceutical, medical and disinfectant product suppliers.
The highest-valued investments planned for 2020 in both industries are now on standby, due to the uncertain outlook; companies are postponing their spending decisions to the fourth quarter.
Industrial Manufacturing
Industrial Info has identified 124 automotive plants that have suspended automotive production since March 23 due to COVID-19.
Automakers are opening their production lines to support the production of artificial respirators, including the components and parts.
Mexico
According to the Mexican Association of Automotive Dealers (AMDA), decreased activity in Asia, as well as reduced demand for automobiles in the domestic market, has caused a 16.2% drop in new-vehicle imports in Mexico. Domestic production has seen its biggest drop in 11 years, since the 2009 global economic crisis.
FCA is restarting operations in Saltillo city at a vehicle assembly plant, an engine plant and a stamping plant. VWCO's production lines in Mexico will reopen on May 4.
Toyota will gradually reopen operations at its plant in Guanajuato, Mexico, beginning May 4.
Honda has extended the shutdown of two Mexican plants until May 8.
Brazil
Honda announced that it will extend until June 25 the stoppage of automobile production in its plants in Brazil.
Toyota has postponed return of production at Brazilian plants until June 22-24.
General Motors has extended the shutdown of its Brazilian plants by 60 days until mid-June.
BMW has extended the shutdown of its Brazilian plants through May 4.
Mercedes-Benz plans to resume production at its Brazilian plants at the beginning of May.
Nissan has extended production stoppage at its Resende Plant for another 30 days until May 21.
Hyundai has extended a suspension of production at its plant in Piracicaba until May 27.
VWCO's (MAN Latin America) plant in Resende will reopen on April 27, but with a smaller workforce for 60 days.
VW has suspended investment in its Gol replacement project.
Pirelli is resuming tire production at its Campinas and Gravatai plants.
Argentina
Pirelli plans to resume production at its tire plant in Argentina by the end of May.
Toyota Motor Corporation has extended a suspension of production at its Plant in Zarate until mid-May.
Volkswagen Argentina has proposed to open next week its two plants in Argentina: the box factory in Cordoba, and the vehicle factory in Pacheco, Buenos Aires. The company plans to restart production of the MQ250 boxes--almost entirely for export--starting next April 27, with 40% of its workforce. The new MQ281 box project could be delayed.
Alternative Fuels
Brazilian sugar and ethanol producers are entering survival mode, reducing harvest operations and seeking credit lines to resist the drop in fuel demand caused by the COVID-19 pandemic. Government restrictions on movement and companies to curb the spread of the virus have hampered global demand. In Brazil, where most cars can run on gasoline or ethanol, the sector has been deeply affected. According to industry association Unica, ethanol sales in southcentral Brazil fell 20% in the second half of March. Given the crisis, some companies have decided to delay harvest operations. Others are rushing to expand ethanol storage capacity, as mills seek additional and more expensive lines of credit and reduce some care for cane fields, which could harm next year's sugarcane production.
One example is Usina Santa Isabel, a company with two plants in the state of São Paulo that crush around 6 million tons of cane per year. Usina Santa Isabel only expects to sell 30-40% its normal volume of ethanol in April and up to 60% by May. In order to combat the effects of the virus, the company is building an additional tank to store ethanol and is setting up a revolving credit line. Additionally, many ethanol producers with the ability to shift production to sugar are doing so; consultancy firm FG/A says that during the 2020/21 harvest, up to 30% less ethanol and 40% more sugar will be produced than last year. Furthermore, the cost of producing hydrated ethanol in Brazil is currently estimated at R$1,377 per cubic meter. In this way, the sugar mills of southcentral Brazil are starting the 2020/21 harvest's production with a negative margin of approximately R$61 per cubic meter of hydrated ethanol. Such margins could seriously affect independent ethanol producers, who could find themselves with no sources of financing, flow or working capital, and will be producing a product with little or no remuneration in some cases.
Companies are reacting to the economic crisis brought on by COVID-19 in different ways. Adecoagro, which owns plants in Ivinhema and Angelica Amandina, is suspending contracts for a small portion of its staff for 60 days, with 70% of their wages to be covered by the government. Colombo Agroindústria in Ariranha is trying to maintain production and social-distancing measures by installing sanitation booths, in which an approach sensor activates a vaporization system for sanitizing solution when employees enter the cabin. The procedure is expected to take place at the start and at the end of the workday.
Moreover, the effects of COVID-19 have started to delay large corn-ethanol related investments. Grupo São Martinho's planned corn ethanol projects in Quirinópolis (200 million metric liters per year of ethanol, 140,000 tons per year of DDGS and 8,000 tons per year of corn oil) were initially set for approval at the start of the year, with construction estimated to commence during the second semester of 2020. As a result of the pandemic, these investments have been delayed for up to six months until the post-crisis demand outlook for corn-based ethanol is clearer.
Metals and Minerals
Although mining companies in Brazil can operate normally, they have started to adopt severe preventative measures or have suspended operations. Other companies are working with reduced labor.
Vale is continuing with construction at its Salobo III mine expansion. The $1.1 billion investment is expected to be operational by 2022, but the schedule could face further delays.
The $1.7 billion Morro Do Pilar Project, owned by MLog S.A., could be delayed due to COVID-19's impact on the supply chain. The company is evaluating the possible economic impact.
Peru considers its mining activities to be "essential" and is allowing companies to continue operations; however, companies have reduced the number of workers and others have suspended operations.
Minsur has suspended activities at its Mina Justa project. Mina Justa is under construction and represents an investment of approximately $2 billion.
Mining activity represents 60% of Peru's exports. The economic impact COVID-19 is uncertain. Due to the low prices of commodities and the reduced commercial market, many projects will be suspended or pushed out.
Mining operations in Mexico continue to be shuttered. Major mining companies continue to push for mining to be deemed essential, as in many Latin American countries.
Mining companies in Chile have started to reduce their budgets for 2020 and are suspending construction projects. Major player Antofagasta Minerals announced that its capital budget for 2020 will be reduced and that copper production will be lower than in previous years. Antofagasta has decided to suspend the under-construction Los Pelambres project for at least four months. The copper price has fallen about 18% during 2020.
Teck Resources has suspended the construction of its Quebrada Blanca II project indefinitely. The company says the suspension will cost it about $23 million.
The Nueva Union Project, a joint venture between Teck Resources and Goldcorp, also could be affected. Owners were developing the feasibility study, but the COVID-19 outbreak could affect the project's timeline.
Refining
Economic run cuts and shutdowns associated with COVID-19 have increased over the past week in Latin America. The drop in consumption and storage capacity that continues to reach its limits has forced the downstream sector to lower its production capacity even further, and some facilities were forced to shut down temporarily until the market returns to normal.
The deterioration in refining conditions stemming from COVID-19 led to a historic collapse in crude prices, although this has mainly affected oil producers.
Industrial Info has identified 2,595,450 barrels per day of offline crude capacity from Latin America's 7,265,490 barrels per day of installed crude capacity in the following countries:
Argentina:
Axion Energy and Trafigura Pte Limited continue to process at lower rates at their refineries. The 85,000-barrel-per-day Campana Refinery is running at approximately 77% of total capacity, and the 31,500-barrel-per-day Bahia Blanca refinery is processing at approximately 80%. The companies will be evaluating those rates as product demand continues to decrease and storage capabilities reach their limits.
Raizen Argentina shut down its 93,000-barrel-per-day Buenos Aires refinery, located in Dock Sud, on April 17 due to a drop in demand and insufficient storage capacity. Only Dispatch and Utilities (Power and Vapor) Services remain online. Early estimations indicate that the facility will remain offline for at least 30 days, but that could be extended, depending on when the market returns to normal. Industrial Info has learned that the refinery was running at approximately 60% of total capacity prior to the shutdown.
Chile:
ENAP Refinerias remains operational at normal throughput at its 100,000-barrel-per-day Aconcagua and 115,700-barrel-per-day Bio Bio refineries, as part of a company overproduction strategy, which is being followed in the event the company has to shut down. Separately, ENAP continues to perform planned repairs that began on March 6 in Aconcagua and on April 17 in Bio Bio.
Dominican Republic:
Earlier this week, Refineria Dominicana de Petroleo S.A. shut down its 34,000-barrel-per-day refinery in Santo Domingo, due to a drop in product demand and insufficient storage capacity. Only Dispatch and Utilities (Power and Vapor) Services remain online. Early estimations indicate that the facility will remain offline until at least mid-May, but that could be extended, depending on when the market returns to normal. The refinery was running at approximately 60% of total capacity prior to the shutdown.
Ecuador:
EP Petroecuador shut down its 45,400-barrel-per-day refinery in La Libertad, Ecuador, due to COVID-19 and storage unavailability. The facility, offline since April 4, was initially expected to remain as such for two weeks; however, the company decided to extend its duration, and the restart will depend on the resumption of fuel demand.
EP Petroecuador shut down its 110,000-barrel-per-day refinery in Esmeraldas, Ecuador. On April 7, the entire site went offline due to a power outage and caused severe damage to the FCCU compressor; the site was not able to restore operations at that time, and it will remain offline until market conditions change enough to justify the refinery's return to service. Separately, the turnaround on the Train 2 Area is now expected to occur by late July 2020; the area includes the 55,000-barrel-per-day Crude 2, 15,900-barrel-per-day Vacuum 2, 15,000-barrel-per-day Visbreaker 2 and associated units, which previously had been scheduled for May, then postponed until June/July.
Venezuela:
PDVSA will keep 77,000-barrel-per-day FCC and associated units at its 295,000-barrel-per-day Cardon Refinery closed until at least early May, due to lack of labor and financial constraints.
PDVSA also is keeping the 79,500-barrel-per-day Crude DA-1 offline at its 181,500-barrel-per-day Puerto La Cruz refinery. Crude DA-1 had been offline from September 1, 2019, until January 11, 2020, for planned repairs and then forced offline due to mechanical issues; a tentative restart date has been set for late May 2020, due to financial constraints and COVID-19.
Colombia:
Ecopetrol continues to operate its 165,000-barrel-per-day refinery in Cartagena, Colombia, at approximately 50%. It is expected to continue as such until late April, or whenever mandatory quarantines end. Plant personnel were unable to estimate the duration, as the restart depends on state guidelines.
Jamaica:
Petroleum Corporation of Jamaica was forced to de-rate its 35,000-barrel-per-day refinery in Kingston, Jamaica, another 10% from its already-repressed value. Refinery authorities will be evaluating the current 40% rate cut and may have to lower it further if demand continues to drop.
Brazil:
Petrobras has rescheduled a 30-day major turnaround, set for May 2020, at its 189,000-barrel-per-day REFAP refinery; however, the company may delay it further. The refinery has been processing at 60% since March 30.
Petrobras continues with the shutdown of its 207,500-barrel-per-day Crude U200A, 53,000-barrel-per-day FCCU 2 (U-220A) and 31,500-barrel-per-day HDT 2 (U-283A) at its 415,000-barrel-per-day REPLAN refineries. The crude unit went offline on February 1 for maintenance, while the FCCU 2 and HDT 2 went offline March 1 as an opportunity outage. The remaining units at the refinery are processing at 60% capacity.
Mexico:
Pemex TRI continues to run its 243,000-barrel-per-day refinery in Salamanca, Mexico, at lower rates due to COVID-19 and inventory controls related to the company's finances. Only part of the workforce is assisting at the facility, which is operating at approximately 80,000 barrels per day.
Quebec, Canada
Suncor Energy has further reduced production rates at its 130,000-barrel-per-day refinery in Montreal, Quebec, up to 50% from the already-depressed 20%, and will be evaluating that rate as driving and fuel demand remain low.
Valero continues to run at minimum rates at its 265,000-barrel-per-day Jean Gaulin refinery.
Oil & Gas
Uncertainty is rising in the Latin American oil and gas sector, with Mexico among the countries seeing prices for its crude oil mix. The outlook for state-owned oil company Pemex is negative, owing to the high costs of production in mature fields and the lack of storage capacity available to survive the fall in prices. Mexican President Andrés Manuel López Obrador announced a special investment in Pemex to increase its number of new wells and to develop new fields. The company is working on new wells in the offshore Pokche field--one of 20 strategic fields selected by Pemex in 2019 to increase national hydrocarbon production. However, the company might close the newest Pemex wells to reduce crude production until market condition improve. Early this week, the company was forced to shut down its Ku-S platform, which is a key part of production in the Ku-Maloob-Zaap offshore cluster, due to confirmed COVID-19 cases onboard.
IENOVA, a subsidiary of U.S. company Sempra Energy, is delaying capital approval for the first phase of its liquefaction project on the Mexico Pacific coast until the third quarter, and it says the second phase will depend on global liquefied natural gas (LNG) demand. Repsol, Shell and Pantera Energy E&P reaffirmed their presence and permanence in Mexico, with new exploratory programs for their oil concessions.
In Brazil, the onshore upstream sector is seeing the biggest impact of the steep drop in oil prices, led by multiple private, medium-sized companies, which acquired oil concessions previously operated by Petrobras. Private companies 3R Petroleum, Petroreconcavo and Petro Victory are evaluating new strategies for the development of their mature fields in the current market scenario.
In Argentina, state-owned YPF continues to analyze the current market situation and deal with infrastructure problems. Gas and crude oil production have decreased 15% compared with last month, and a greater drop in domestic demand for products is expected in the following weeks. The multinational Wintershall Dea has confirmed the intention to continue with its massive development stage in the Aguada Federal and Bandurria Norte fields in two phases, including an early production facility, drilling programs, and investments in pipeline infrastructure to begin commercializing oil and associated gas from the area in 2021.
Chemical Processing
Most of Latin America's chemical companies are trying to maintain production, at least at minimum rates, while industrial gas and surfactant producers need to operate at normal rates due to market demand. The petrochemical sector, which includes ethylene and polyethylene production, is producing at minimum rates until early May, when producers need to evaluate their next steps. Among the factors taken into consideration will be the deep crisis facing the global petroleum industry and low market demand. Most projects (capital and maintenance) are being delayed until the second half--or even further out--due to the uncertainty market outlook.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
The Latin American region's Power Industry remains stable. Industrial Info has identified 245 projects in Latin America that have been affected by the pandemic, but there have been no cancellations to date.
Pharmaceuticals
The most promising drugs for COVID-19 that are undergoing clinical trials belong to a few giant pharmaceutical companies: Abbvie, Gilead and Toyama Chemicals. Recently, Abbvie voluntarily cancelled its patenting of medicines that are being tested for COVID-19 treatment; if these trials are successful, other pharmaceutical and biotech laboratories also could produce them as well. These drugs could be produced at least in Mexico, Peru and Chile, as those countries already have the technology in place. Argentina, Colombia and Uruguay could be included on the list once the patent is ready.
In Brazil, ANVISA, the national agency for health surveillance, authorized 39 rapid test kits produced and/or distributed by international and Brazilian companies. Brazilian company Vent-Logos Sistemas Logicos will expand its respirator-production capacity at its plant in Vitoria, Espirito Santo. The project is expected to be completed by the fourth quarter.
In Cuba, Centro de Ingenieria Genetica y Biotecnologia will add a processing line of injectable interferon vaccines that could be ready by August. These types of proteins have shown some success in treating patients with COVID-19.
Food & Beverage -- Pulp & Paper
The Food & Beverage and Pulp & Paper industries remain active and operational; however, in South America and Mexico, sectors which rely heavily on exports such as poultry and meat, agricultural processing and pulp already are suffering from slowing demand. This has led companies to reduce production or shut down some plants and production units.
The paperboard, carton board and package-converting sectors are operating at their designed capacities, and are facing extremely high market demand for packaging for pharmaceutical, medical and disinfectant product suppliers.
The highest-valued investments planned for 2020 in both industries are now on standby, due to the uncertain outlook; companies are postponing their spending decisions to the fourth quarter.
Industrial Manufacturing
Industrial Info has identified 124 automotive plants that have suspended automotive production since March 23 due to COVID-19.
Automakers are opening their production lines to support the production of artificial respirators, including the components and parts.
Mexico
According to the Mexican Association of Automotive Dealers (AMDA), decreased activity in Asia, as well as reduced demand for automobiles in the domestic market, has caused a 16.2% drop in new-vehicle imports in Mexico. Domestic production has seen its biggest drop in 11 years, since the 2009 global economic crisis.
FCA is restarting operations in Saltillo city at a vehicle assembly plant, an engine plant and a stamping plant. VWCO's production lines in Mexico will reopen on May 4.
Toyota will gradually reopen operations at its plant in Guanajuato, Mexico, beginning May 4.
Honda has extended the shutdown of two Mexican plants until May 8.
Brazil
Honda announced that it will extend until June 25 the stoppage of automobile production in its plants in Brazil.
Toyota has postponed return of production at Brazilian plants until June 22-24.
General Motors has extended the shutdown of its Brazilian plants by 60 days until mid-June.
BMW has extended the shutdown of its Brazilian plants through May 4.
Mercedes-Benz plans to resume production at its Brazilian plants at the beginning of May.
Nissan has extended production stoppage at its Resende Plant for another 30 days until May 21.
Hyundai has extended a suspension of production at its plant in Piracicaba until May 27.
VWCO's (MAN Latin America) plant in Resende will reopen on April 27, but with a smaller workforce for 60 days.
VW has suspended investment in its Gol replacement project.
Pirelli is resuming tire production at its Campinas and Gravatai plants.
Argentina
Pirelli plans to resume production at its tire plant in Argentina by the end of May.
Toyota Motor Corporation has extended a suspension of production at its Plant in Zarate until mid-May.
Volkswagen Argentina has proposed to open next week its two plants in Argentina: the box factory in Cordoba, and the vehicle factory in Pacheco, Buenos Aires. The company plans to restart production of the MQ250 boxes--almost entirely for export--starting next April 27, with 40% of its workforce. The new MQ281 box project could be delayed.
Alternative Fuels
Brazilian sugar and ethanol producers are entering survival mode, reducing harvest operations and seeking credit lines to resist the drop in fuel demand caused by the COVID-19 pandemic. Government restrictions on movement and companies to curb the spread of the virus have hampered global demand. In Brazil, where most cars can run on gasoline or ethanol, the sector has been deeply affected. According to industry association Unica, ethanol sales in southcentral Brazil fell 20% in the second half of March. Given the crisis, some companies have decided to delay harvest operations. Others are rushing to expand ethanol storage capacity, as mills seek additional and more expensive lines of credit and reduce some care for cane fields, which could harm next year's sugarcane production.
One example is Usina Santa Isabel, a company with two plants in the state of São Paulo that crush around 6 million tons of cane per year. Usina Santa Isabel only expects to sell 30-40% its normal volume of ethanol in April and up to 60% by May. In order to combat the effects of the virus, the company is building an additional tank to store ethanol and is setting up a revolving credit line. Additionally, many ethanol producers with the ability to shift production to sugar are doing so; consultancy firm FG/A says that during the 2020/21 harvest, up to 30% less ethanol and 40% more sugar will be produced than last year. Furthermore, the cost of producing hydrated ethanol in Brazil is currently estimated at R$1,377 per cubic meter. In this way, the sugar mills of southcentral Brazil are starting the 2020/21 harvest's production with a negative margin of approximately R$61 per cubic meter of hydrated ethanol. Such margins could seriously affect independent ethanol producers, who could find themselves with no sources of financing, flow or working capital, and will be producing a product with little or no remuneration in some cases.
Companies are reacting to the economic crisis brought on by COVID-19 in different ways. Adecoagro, which owns plants in Ivinhema and Angelica Amandina, is suspending contracts for a small portion of its staff for 60 days, with 70% of their wages to be covered by the government. Colombo Agroindústria in Ariranha is trying to maintain production and social-distancing measures by installing sanitation booths, in which an approach sensor activates a vaporization system for sanitizing solution when employees enter the cabin. The procedure is expected to take place at the start and at the end of the workday.
Moreover, the effects of COVID-19 have started to delay large corn-ethanol related investments. Grupo São Martinho's planned corn ethanol projects in Quirinópolis (200 million metric liters per year of ethanol, 140,000 tons per year of DDGS and 8,000 tons per year of corn oil) were initially set for approval at the start of the year, with construction estimated to commence during the second semester of 2020. As a result of the pandemic, these investments have been delayed for up to six months until the post-crisis demand outlook for corn-based ethanol is clearer.
Metals and Minerals
Although mining companies in Brazil can operate normally, they have started to adopt severe preventative measures or have suspended operations. Other companies are working with reduced labor.
Vale is continuing with construction at its Salobo III mine expansion. The $1.1 billion investment is expected to be operational by 2022, but the schedule could face further delays.
The $1.7 billion Morro Do Pilar Project, owned by MLog S.A., could be delayed due to COVID-19's impact on the supply chain. The company is evaluating the possible economic impact.
Peru considers its mining activities to be "essential" and is allowing companies to continue operations; however, companies have reduced the number of workers and others have suspended operations.
Minsur has suspended activities at its Mina Justa project. Mina Justa is under construction and represents an investment of approximately $2 billion.
Mining activity represents 60% of Peru's exports. The economic impact COVID-19 is uncertain. Due to the low prices of commodities and the reduced commercial market, many projects will be suspended or pushed out.
Mining operations in Mexico continue to be shuttered. Major mining companies continue to push for mining to be deemed essential, as in many Latin American countries.
Mining companies in Chile have started to reduce their budgets for 2020 and are suspending construction projects. Major player Antofagasta Minerals announced that its capital budget for 2020 will be reduced and that copper production will be lower than in previous years. Antofagasta has decided to suspend the under-construction Los Pelambres project for at least four months. The copper price has fallen about 18% during 2020.
Teck Resources has suspended the construction of its Quebrada Blanca II project indefinitely. The company says the suspension will cost it about $23 million.
The Nueva Union Project, a joint venture between Teck Resources and Goldcorp, also could be affected. Owners were developing the feasibility study, but the COVID-19 outbreak could affect the project's timeline.
Refining
Economic run cuts and shutdowns associated with COVID-19 have increased over the past week in Latin America. The drop in consumption and storage capacity that continues to reach its limits has forced the downstream sector to lower its production capacity even further, and some facilities were forced to shut down temporarily until the market returns to normal.
The deterioration in refining conditions stemming from COVID-19 led to a historic collapse in crude prices, although this has mainly affected oil producers.
Industrial Info has identified 2,595,450 barrels per day of offline crude capacity from Latin America's 7,265,490 barrels per day of installed crude capacity in the following countries:
Argentina:
Axion Energy and Trafigura Pte Limited continue to process at lower rates at their refineries. The 85,000-barrel-per-day Campana Refinery is running at approximately 77% of total capacity, and the 31,500-barrel-per-day Bahia Blanca refinery is processing at approximately 80%. The companies will be evaluating those rates as product demand continues to decrease and storage capabilities reach their limits.
Raizen Argentina shut down its 93,000-barrel-per-day Buenos Aires refinery, located in Dock Sud, on April 17 due to a drop in demand and insufficient storage capacity. Only Dispatch and Utilities (Power and Vapor) Services remain online. Early estimations indicate that the facility will remain offline for at least 30 days, but that could be extended, depending on when the market returns to normal. Industrial Info has learned that the refinery was running at approximately 60% of total capacity prior to the shutdown.
Chile:
ENAP Refinerias remains operational at normal throughput at its 100,000-barrel-per-day Aconcagua and 115,700-barrel-per-day Bio Bio refineries, as part of a company overproduction strategy, which is being followed in the event the company has to shut down. Separately, ENAP continues to perform planned repairs that began on March 6 in Aconcagua and on April 17 in Bio Bio.
Dominican Republic:
Earlier this week, Refineria Dominicana de Petroleo S.A. shut down its 34,000-barrel-per-day refinery in Santo Domingo, due to a drop in product demand and insufficient storage capacity. Only Dispatch and Utilities (Power and Vapor) Services remain online. Early estimations indicate that the facility will remain offline until at least mid-May, but that could be extended, depending on when the market returns to normal. The refinery was running at approximately 60% of total capacity prior to the shutdown.
Ecuador:
EP Petroecuador shut down its 45,400-barrel-per-day refinery in La Libertad, Ecuador, due to COVID-19 and storage unavailability. The facility, offline since April 4, was initially expected to remain as such for two weeks; however, the company decided to extend its duration, and the restart will depend on the resumption of fuel demand.
EP Petroecuador shut down its 110,000-barrel-per-day refinery in Esmeraldas, Ecuador. On April 7, the entire site went offline due to a power outage and caused severe damage to the FCCU compressor; the site was not able to restore operations at that time, and it will remain offline until market conditions change enough to justify the refinery's return to service. Separately, the turnaround on the Train 2 Area is now expected to occur by late July 2020; the area includes the 55,000-barrel-per-day Crude 2, 15,900-barrel-per-day Vacuum 2, 15,000-barrel-per-day Visbreaker 2 and associated units, which previously had been scheduled for May, then postponed until June/July.
Venezuela:
PDVSA will keep 77,000-barrel-per-day FCC and associated units at its 295,000-barrel-per-day Cardon Refinery closed until at least early May, due to lack of labor and financial constraints.
PDVSA also is keeping the 79,500-barrel-per-day Crude DA-1 offline at its 181,500-barrel-per-day Puerto La Cruz refinery. Crude DA-1 had been offline from September 1, 2019, until January 11, 2020, for planned repairs and then forced offline due to mechanical issues; a tentative restart date has been set for late May 2020, due to financial constraints and COVID-19.
Colombia:
Ecopetrol continues to operate its 165,000-barrel-per-day refinery in Cartagena, Colombia, at approximately 50%. It is expected to continue as such until late April, or whenever mandatory quarantines end. Plant personnel were unable to estimate the duration, as the restart depends on state guidelines.
Jamaica:
Petroleum Corporation of Jamaica was forced to de-rate its 35,000-barrel-per-day refinery in Kingston, Jamaica, another 10% from its already-repressed value. Refinery authorities will be evaluating the current 40% rate cut and may have to lower it further if demand continues to drop.
Brazil:
Petrobras has rescheduled a 30-day major turnaround, set for May 2020, at its 189,000-barrel-per-day REFAP refinery; however, the company may delay it further. The refinery has been processing at 60% since March 30.
Petrobras continues with the shutdown of its 207,500-barrel-per-day Crude U200A, 53,000-barrel-per-day FCCU 2 (U-220A) and 31,500-barrel-per-day HDT 2 (U-283A) at its 415,000-barrel-per-day REPLAN refineries. The crude unit went offline on February 1 for maintenance, while the FCCU 2 and HDT 2 went offline March 1 as an opportunity outage. The remaining units at the refinery are processing at 60% capacity.
Mexico:
Pemex TRI continues to run its 243,000-barrel-per-day refinery in Salamanca, Mexico, at lower rates due to COVID-19 and inventory controls related to the company's finances. Only part of the workforce is assisting at the facility, which is operating at approximately 80,000 barrels per day.
Quebec, Canada
Suncor Energy has further reduced production rates at its 130,000-barrel-per-day refinery in Montreal, Quebec, up to 50% from the already-depressed 20%, and will be evaluating that rate as driving and fuel demand remain low.
Valero continues to run at minimum rates at its 265,000-barrel-per-day Jean Gaulin refinery.
Oil & Gas
Uncertainty is rising in the Latin American oil and gas sector, with Mexico among the countries seeing prices for its crude oil mix. The outlook for state-owned oil company Pemex is negative, owing to the high costs of production in mature fields and the lack of storage capacity available to survive the fall in prices. Mexican President Andrés Manuel López Obrador announced a special investment in Pemex to increase its number of new wells and to develop new fields. The company is working on new wells in the offshore Pokche field--one of 20 strategic fields selected by Pemex in 2019 to increase national hydrocarbon production. However, the company might close the newest Pemex wells to reduce crude production until market condition improve. Early this week, the company was forced to shut down its Ku-S platform, which is a key part of production in the Ku-Maloob-Zaap offshore cluster, due to confirmed COVID-19 cases onboard.
IENOVA, a subsidiary of U.S. company Sempra Energy, is delaying capital approval for the first phase of its liquefaction project on the Mexico Pacific coast until the third quarter, and it says the second phase will depend on global liquefied natural gas (LNG) demand. Repsol, Shell and Pantera Energy E&P reaffirmed their presence and permanence in Mexico, with new exploratory programs for their oil concessions.
In Brazil, the onshore upstream sector is seeing the biggest impact of the steep drop in oil prices, led by multiple private, medium-sized companies, which acquired oil concessions previously operated by Petrobras. Private companies 3R Petroleum, Petroreconcavo and Petro Victory are evaluating new strategies for the development of their mature fields in the current market scenario.
In Argentina, state-owned YPF continues to analyze the current market situation and deal with infrastructure problems. Gas and crude oil production have decreased 15% compared with last month, and a greater drop in domestic demand for products is expected in the following weeks. The multinational Wintershall Dea has confirmed the intention to continue with its massive development stage in the Aguada Federal and Bandurria Norte fields in two phases, including an early production facility, drilling programs, and investments in pipeline infrastructure to begin commercializing oil and associated gas from the area in 2021.
Chemical Processing
Most of Latin America's chemical companies are trying to maintain production, at least at minimum rates, while industrial gas and surfactant producers need to operate at normal rates due to market demand. The petrochemical sector, which includes ethylene and polyethylene production, is producing at minimum rates until early May, when producers need to evaluate their next steps. Among the factors taken into consideration will be the deep crisis facing the global petroleum industry and low market demand. Most projects (capital and maintenance) are being delayed until the second half--or even further out--due to the uncertainty market outlook.
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