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Petrobras Forms Partnership with Unigel to Outsource Fertilizer Production

Written by Paulo Nogueira

Published on 02/01/2024 at 16:00

Oil and Gas

Unidade da Unigel em Camaçari (Foto: Divulgação) – Todos os direitos: EPBR

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Agreement Enables Production in Bahia and Sergipe, Unigel, Natural Gas, Cost of Gas, Petrochemical Sector, Investments, Asphalt Residues.

Petrobras announced today the signing of a tolling agreement with Unigel for the production of fertilizers at its plants in Sergipe and Bahia. According to Unigel, the agreement will ‘ensure the continuity of production of nitrogen fertilizers at the facilities’.

Details regarding deadlines, volumes, and values of the contract have not been disclosed. Petrobras will supply natural gas for the fertilizer plants, which are leased to Unigel under 10-year contracts that started in 2021. At that time, Petrobras had withdrawn from the fertilizer sector.

Plant Standstill and the Impact on Fertilizers

The fertilizer plants are facing a challenging moment, paused since June. In this context, Unigel recorded a loss of R$ 1 billion by September this year and was forced to halt fertilizer production in the Agro segment. This includes products such as ammonium sulfate, ammonia, urea, and ARLA, an automotive additive needed for pollutant emission control.

ARTICLE CONTINUES BELOW

The Petrochemical Sector and the Global Crisis

The global petrochemical sector is facing a crisis, which also affects Brazil. This is largely due to the mismatch between the drop in product prices and the cost of natural gas.

Plant Standstill and the Measures Taken

One of the main measures adopted to deal with this situation was the shutdown of several plants, aiming to reduce inventory levels. In June 2023, production at various plants was interrupted, including the Agro plants, the styrene plant in Cubatão, the polystyrene plant in São José dos Campos, and the acrylonitrile plant in Camaçari. Additionally, the metacrylates plant in Candeias was operating at only half of its capacity.

The Future of Fertilizer Production

The agreement between Petrobras and Unigel, which began official negotiations in June, may bring significant changes. The president of Petrobras, Jean Paul Prates, announced that the company is planning to return to fertilizer production, within an updated and modernized logic, in the context of the energy transition.

Investments and Return of Operations in Araucária

Following the investment plan approved in December, there is a forecast for the return of operations in Araucária, Paraná, in 2024. The unit uses asphalt residues as raw material, and in the previous management, Petrobras attempted to lease the plant without success. Additionally, studies were initiated for the resumption of construction in Três Lagoas, Mato Grosso do Sul, but without an official return date.

Source: EPBR

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Petrobras Forms Partnership with Unigel to Outsource Fertilizer Production

Agreement Enables Production in Bahia and Sergipe, Unigel, Natural Gas, Cost of Gas, Petrochemical Sector, Investments, Asphalt Residues.

Plant Standstill and the Impact on Fertilizers

The Petrochemical Sector and the Global Crisis

Plant Standstill and the Measures Taken

The Future of Fertilizer Production

Investments and Return of Operations in Araucária

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Petrobras Forms Partnership with Unigel to Outsource Fertilizer Production

Agreement Enables Production in Bahia and Sergipe, Unigel, Natural Gas, Cost of Gas, Petrochemical Sector, Investments, Asphalt Residues.

Plant Standstill and the Impact on Fertilizers

The Petrochemical Sector and the Global Crisis

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