Argentina's LPG Exports Set to Rise as Mega Gas Project Kicks Off

Strategic Insights -

Argentina is poised to increase its LPG exports as the Mega gas project, a joint venture between Repsol-YPF, Petrobras, and Dow, begins initial production and testing this month. The key component of the project is a massive $208mn natural gas separation plant in the Neuquen basin, which will process nearly 1.3bn ft^3/d of natural gas liquids (NGLs), producing 1.1bn ft^3/d of natural gas and 176mn ft^3/d of mixed NGLs. This expansion is expected to add up to 617,000 t/yr of LPG output, raising Argentina's total LPG production by a third.

Key Takeaways:

  • The Mega gas project, a joint venture between Repsol-YPF, Petrobras, and Dow, will begin initial production and testing this month, with first production for export expected by mid-December.
  • The project involves a $208mn natural gas separation plant at Loma de la Lata in the Neuquen basin, which will process nearly 1.3bn ft^3/d of NGLs, producing 1.1bn ft^3/d of natural gas and 176mn ft^3/d of mixed NGLs.
  • The project will add up to 617,000 t/yr of LPG output, raising Argentina's total LPG production by a third, with around 40% of the LPG output (240,000 t/yr) directed to the domestic market and over 60% for export.
  • All LPG exports will be directed to Brazil to meet the country's growing petrochemical feedstock demand.
  • Petrobras will market the project's natural gasoline and LPG in Argentina and Brazil, while Repsol-YPF will market the natural gas from the separation plant, focusing on Argentinian demand, as well as exports within the Southern Cone.
  • A consortium of Dow, Repsol-YPF, and Japanese trading firm Itochu will hold the ethane marketing contract.
  • Mega is one of the largest LPG expansions to come on stream in Latin America in years, but growing import demand in the region's two biggest markets, Mexico and Brazil, looks set to keep Latin America a net importer of LPG for years to come.

Statistics:

  • The Mega gas project is expected to add up to 617,000 t/yr of LPG output.
  • Argentina's total LPG production is expected to rise by a third.
  • Around 40% of the LPG output (240,000 t/yr) will be directed to the domestic market, while over 60% will be for export.
  • All LPG exports will be directed to Brazil to meet the country's growing petrochemical feedstock demand.
  • The project's natural gas separation plant will process nearly 1.3bn ft^3/d of NGLs, producing 1.1bn ft^3/d of natural gas and 176mn ft^3/d of mixed NGLs.
  • The project's ethane output is expected to hit 534,000 t/yr.

Sources:

  • LPG World (3 December 1999, p7)
  • LPG World (22 July 1999, p8)
  • LPG World (7 September 1999, p5)