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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 At that time, Petrobras had withdrawn from the fertilizer sector.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.
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The government will pay R$ 1.20 for each liter of diesel that Brazil imports and for the first time in history requires distributors to reveal how much they profit — those who hide their margins will face fines of up to R$ 500 million…
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Under kilometers of water, rock, and salt, Brazil hides a colossal wealth that led an official guide from the U.S. government to recognize the country as the owner of the largest ultra-deep oil reserves in the world.
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Iran said that the Strait of Hormuz is open, but in practice only 1 non-Iranian oil tanker managed to cross in 24 hours — before the blockade, 100 ships passed per day.
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Petrobras completes 1,300 hours of work and 15 km of subsea lines to connect the Búzios 90 well to the P-79 — the platform is ready to produce 180,000 barrels per day and is just awaiting ANP approval.
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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