Petrobras, Petroperu to Build Petrochemical Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Peruvian oil company, Petroperu, and its Brazilian counterpart, Petrobras, plan to build a new petrochemical plant. The project, which is expected to cost between $800 million and $1 billion, will have a production capacity of about 750,000 tons per year of ammonia and will mainly produce chemicals for Peru's growing mining sector. Ammonium phosphate, ammonium nitrate, which are used to make explosives, and sodium cyanide, which separates minerals from rock, are some of the derivative products under consideration to be produced in the new plant.

There are two possible locations for the plant: in Marcona at a center for the mining industry in the southern coastal area of Peru, 530 kilometers away from Lima, or near the port of Ilo in the Moquegua Department of southern Peru. Peruvian authorities have said that financial details are still under discussion, and that the two oil companies are looking for a third investment partner, which is likely to be a company from the local mining sector, either a Peruvian or international firm that is already importing chemicals for explosives. Orica Mining Services (Australia) and Eanex (Santiago, Chile) are two companies that have expressed interest in investing in ammonia projects and may take part in the project. Petroperu and Petrobras aim to secure contracts in 2008 and start construction by early 2009 to have the plant operational by 2012.

Peru's government said the gas feed for the plant will be obtained from Lot 57, near the Camisea gas field in southern Peru that is owned by Petrobras as a minority partner in the field (46%) and produces 2 trillion cubic feet of natural gas. Government officials in Lima are also fostering investments to develop the local mining industry.

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