Planned Ethylene Turnarounds in South America Increase in 2011

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Researched by Industrial Info Resources (Sugar Land, Texas)--For the past two years, ethylene producers in South America have performed few maintenance turnarounds on installed ethylene plants. This is expected to change drastically in 2011, when an estimated eight of the 14 operational ethylene units located in South America all take planned downtime next year.

During 2010, only two of the originally planned four maintenance turnarounds remained on the 2010 calendar, and there were only three additional unplanned turnarounds. Activity was cut this year, and the number of planned turnarounds was postponed on every occasion feasible, due to poor economics and the cost of extensive repairs during a very depressed period.

The outlook on demand continues to improve, and operating rates have slowly crept upward with it. Demand is improving enough for several new capacity-related projects to get another serious look. There are at least six major ethylene capacity projects in some phase of planning that are scheduled to take place in South America over the next several years, one of which could begin construction next year in Itaborai, Brazil. This project, planned by Petrobras (NYSE:PBR) (Rio de Janeiro, Brazil) is for a grassroot ethylene plant with a design capacity of nearly 1.3 million metric tons per year of ethylene and 880,000 metric tons per year of propylene. The remaining new capacity projects are also major additions with plans to begin construction in either 2012 or 2013, based on current project schedules. All of this proposed new capacity is many years away from becoming a reality and will have little or no impact on the current producers' satisfying demand over the next three to five years.

The ethylene turnarounds planned for next year in South America equal a total of more than 266 days of downtime, making this one of the biggest years for planned turnarounds in several years, perhaps a decade. The largest individual turnaround identified so far is Pequiven Proesca's (Valencia, Venezuela) 60-day turnaround for the 317,000-metric-ton-per-year Olefins II unit in Maracaibo, Venezuela, during the first quarter of next year. Pequiven Proesca is also planning to perform a maintenance turnaround of the company's 205,700-metric-ton-per-year Olefins I unit at the same site during the fourth quarter of next year for approximately 45 days.

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