Gas-Fed $1.1 Billion Petrochem Complex Planned for Amazon’s Manaus

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Researched by Industrial Info Resources (Sugar Land, Texas). Natural gas from the Urucu in the western Amazon region of Brazil will feed a proposed $1.1 billion gas-chemical complex to be built in a free trade zone adjacent to the city of Manaus. The 650-kilometer Coari-Manaus pipeline is scheduled to be complete by the end of 2008, and the state energy utility Petrobras (NYSE:PBR) (Rio de Janeiro, Brazil) is likely to partner with Suframa, Brazils’ free trade zone management company in the project, which has recently completed a feasibility on the project.

The complex will produce ethane, ethyl benzene, methane and fertilizers, and the gas feed will also be used in power plants in the region that are currently using fuel oil and diesel. Petrobras will be the probable supplier of gas to the four separate plants to be built in the complex. The $15 million ethane plant could generate annual revenues of $140 million.

A second $320 million plant will use ethane to manufacture ethylbenzene to be used in the downstream production of a range of petrochemicals. The balance of production will be sold to local and international petrochemical plants. This plant is estimated to produce $700 million in annual revenues.

The plastics manufacturing industry in Manaus will use styrene produced in a second plant that will require an investment of $40 million. This unit will have revenues of $80 million per annum (tpa) and a production capacity of 560,000 tpa.

Methane produced in the third plant will be used in the production of biodiesel fuel for the region, which currently purchases supplies from other Brazilian states. The main focus of this 1.7 million tpa plant will be the export market.

The fourth plant’s output will be aimed at the fertilizer market and will have a capacity for 1.6 million tpa of ammonia and 730,000 tpa of urea. An investment of $300 million in the plant is estimated to produce $310 million in annual revenues. The farmers of the region currently have to buy fertilizers from states far away from Amazonia.

Investors are only expected to commit funds to the project once the Coari-Manaus pipeline is operating. If all investment contracts are finalized by the end of 2009, the complex should be commissioned by 2012/2013.

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