How have the Argentine chemical and petrochemical sectors performed in the last 12 months?

The petrochemical industry had a production almost 10% lower in 2021 than in 2020, mostly due to programmed stops of petrochemical plants with high production volume. In spite of this, local sales in 2021 increased by 27% and exports increased by 24% with respect to 2020.

In 2022, the numbers are still positive. When we compare the first four months, we see production has increased by 16%, local sales by 43% and export sales by 68%. The main things contributing to this increase are thermoplastic resins, fertilizers and agrochemical products. Argentina is a great producer of agricultural products, international prices are on the rise, and more phytosanitary products and fertilizers are consumed.

What progress has been made at Vaca Muerta?

Natural gas makes up more than 50% of Argentina’s energy matrix. This demand is satisfied mostly by local production from Neuquén and in the south of Argentina in Chubut, as well as the off-shore resources in Tierra del Fuego. The rest is covered by imports from Bolivia. During winter peaks, in which residential demand is tripled or quadrupled, it is covered by LNG. There are two re-gassing ships in strategic points of Argentina. Gas oil and fuel oil are also consumed to produce electric power. There is a big opportunity in natural gas, which we have to remember, is considered a transition fuel in all the challenges against climate change.

It is estimated that Vaca Muerta has reserves capable of supplying 100 years of regular gas supply. It is not an issue of geology but engineering. Non-conventional production of gas has grown significantly, but the issue is the transportation needed to move the gas from Vaca Muerta to the market. A new pipeline was tendered that, in its first stage, would join Neuquén to a distribution center in the south of the Buenos Aires. We expect that for the second half of 2023 we will be able to move more gas, and for 2024 to 2025 increase Argentina’s transport capacity by 25%. As a consequence, we expect a second wave of investment in the upstream to supply the extra volume, which would also be tied to gas liquifying. We believe Vaca Muerta could really take off in two or three years.

What steps are being taken to increase domestic fertilizer production in Argentina?

The project for the expansion of urea production in Argentina was being analyzed before the conflict between Russia and Ukraine. Local demand for urea for 2020 and 2021 was almost 2.4 million tons (t). If we consider Profertil produces 1.3 million t, a little more than 1 million t are imported. That signals a possibility to expand in this market. The most important thing is that our neighbor Brazil is the biggest importer of Urea in the world. I think we will have news from Profertil in the coming months.

Which initiatives regarding the circular economy has the Chamber been working on?

One of the biggest challenges for the petrochemical industry is the collection and recycling of plastic. We brought together organizations in the plastic value chain (including the chambers, IPA and producers) to consolidate one voice to speak to all the stakeholders. We joined the Argentine Plastic Industry Chamber with the Argentine Chamber of Plastic Recycling (CAIRPLAS) and ECOPLAS, a nonprofit association working on the circular economy. All of us make up an association called EURECA – Joint Entities Reaffirming Circular Economy in Argentina. Argentina has a few laws regarding plastics, and ahead of us there is a proposed a bottling law, a producer’s extended responsibility law, and one on single-use plastics that will be addressed soon in congress. Local initiatives to incorporate recycled plastic resins to virgin products have been presented, companies are working actively, and these developments are just starting.