Bolivia Plans to Industrialize its Gas Reserves

Dec 7, 2015

Bolivia currently has the second largest natural gas reserves in South America, totaling about 24 trillion cubic feet (tcf), of which close to 85 percent is located in the province of Tarija.  The president, Evo Morales Ayma, initiated a petrochemical construction program with the purpose of industrializing the nation’s huge gas reserves.  Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), the country’s state-run energy company, and Empresa Boliviana de Industrialisation de Hidrocarburos (EBIH), a subsidiary of YPFB, are implementing this strategic plan.  The first phase of this plan involves the construction of the following plants:

  • Rio Grande Natural Gas Processing plant, which became operational in 2014 and was designed to process 1.1 billion cubic feet per day to produce isopentane, natural gasoline and LPG
  • Valle Hermoso Refinery expansion, which began producing diesel in October 2014
  • Gran Chaco Liquid Separations plant, which began operations this year and is designed to process about 1 billion cubic feet per day to produce ethane, LPG, natural gasoline, and isopentane

Rio Grande Small Scale LNG plant, with a processing capacity of 12 million cubic feet per day of natural gas, started up in 2014.   A second phase of this project is being carried out and it involves the construction of 22 regasification stations.  These stations will be used to re-gasify and distribute natural gas to 140,000 homes in 25 neighboring towns.   Bulo Bulo Ammonia-Urea plant is under construction and forecast to come online during the middle of 2016YPFB’s Bulo-Bulo ammonia-urea plant (currently more than 75 percent complete) is the country’s first petrochemical venture.  It has been designed to produce about 420,000 tons of ammonia and 645,000 tons of urea per year. 

Other planned projects include the construction of an ethane-based ethylene and polyethylene plant and a propane dehydro and polypropylene plant in Tarija.  Nexant views the propane dehydro and polypropylene plant as promising with start-up targeted for 2021.  The ethylene and polyethylene plant is considered to be speculative as further information has yet to be announced.  If the ethylene and polyethylene plant were to come online, it will likely be after the construction of the propane dehydro and polypropylene plant. 

Other projects that have been announced by YPFB include 30,000 barrels per day Gas-to-Liquids (GTL) plant, an aromatics plant, and 100,000 tons per year polystyrene plant.  These projects are currently under evaluation. 

The EBIH has announced plans to build 500,000 tons per year methanol-based petrochemical complex, a polyvinyl chloride plant, an aromatics plant, an ethylene oxide and ethylene glycol plant, and an ammonium nitrate plant.  The feasibility of these plants is under assessment. 

With the recent fall in oil prices, several petrochemical companies have canceled or postponed projects.  However, YPFB’s projects continue to move ahead.  Analysts predict further delays will occur as the industry braces itself for an extended period of lower oil prices.  Given the current outlook, several questions arise: Will Bolivia's projects move forward or be delayed?  If these projects do move forward, what will their impact be on the South American petrochemical industry?  Will Bolivia’s products be cost-competitive against other producers?