CF Industries' Petrochemical Complex, Peru
Illinois fertiliser producer CF Industries is planning to invest more than $2bn to develop a petrochemical complex in Peru. The complex will be located 330 miles (530km) south of the capital Lima in San Juan de Marcona, a coastal area in Peru's Ica region.
The complex will consist of two plants, an ammonia plant and a granulated urea plant. The ammonia plant is expected to have a capacity of 2,600t/d and the granulated urea plant will have a capacity of 3,850t/d.
The petrochemical complex will be entirely self sufficient from a power and water point of view. Other facilities in the complex will include urea granulation, storage facilities, truck cargo facilities and docks.
The company carried out detailed front-end engineering design (FEED) at the end of 2009. The environmental impact assessment (EIA) study was submitted to Peruvian Government regulators in February 2010.
A final decision on the project was to be made in early 2010. The FEED study, however, estimated the development costs to be more than the previously anticipated figures and the project was subsequently delayed. Construction of the plant is expected to take three to four years to complete after the groundbreaking.
The petrochemical complex in Peru will produce 930,000t of ammonium nitrate annually. About 50-100% of the ammonia will be converted into 1.3mt of urea. All ammonia that is not converted into urea will be sold.
CF Industries does not have any nitrogen capacity on the west coast of South or North America. The company imports about 300,000t of urea annually. The petrochemical complex in Peru will enable CF to turn into an exporter of urea. It will provide the company with the necessary capacity to produce urea for Peru as well as other markets.
Feedstock used in the petrochemical complex
CF Industries signed a $2bn agreement in October 2009 with the Camisea Consortium to supply natural gas for the petrochemical plant.
CF will buy 99Mf3/d (2.80Mm3/d) on a take-or-pay basis from the consortium consisting of Pluspetrol Peru, Sucursal, Pluspetrol Camisea, Hunt Oil Peru, SK Energy, Tecpetrol Peru, Sonatrach Peru and Repsol Exploracion Peru.
CF has signed the contract for a period of 20 years. The price of natural gas will depend on the index urea price and is expected to be adjusted at regular intervals, either quarterly or monthly. The agreement is subject to the completion of the petrochemical complex and related infrastructure.
The Camisea Consortium produces natural gas from its gas fields located next to Camisea in the Urubamba Valley in Peru. The natural gas produced is distributed from a gas-processing plant situated in Malvinas, near the Camisea fields, to the coast via two pipelines to the Pisco area, 200km south of Lima.
One pipeline transports natural gas liquids (NGLs) to a fractionation plant in Pisco. The other pipeline carrying natural gas goes from Pisco to Lima.
Financing CF Industries' ammonia and a granulated urea plants project
CF is planning to finance half of the plant's costs through investments. The company is seeking finance from the World Bank, Inter-American Development Bank and the investment bank MBA Lazard.
Technology used in the petrochemical complex and market growth for industry in Peru
The technology for the petrochemical complex will be supplied by several companies. For the production of ammonia, Haldor Topsoe, a Danish company specialising in hydroprocessing catalysts for the petroleum and refining industries, will provide the technology.
Snamprogetti, a contractor specialising in designing and implementing refinery projects, will provide technology assistance for the urea plant. Urea granulation technology will be provided by Uhde Fertilizer Technology. Technip was the FEED contractor for the San Juan de petrochemical complex.
CF Industries' petrochemical project is one of the many projects coming up in Peru. The Peruvian Government is attracting investments from foreign companies to invest in petrochemical plants in the region.
Peru's mountains hold large natural gas reserves that can be converted into ammonium nitrate.
Ammonium nitrate is used to manufacture explosives, fertilisers and ethylene for plastics. The Peruvian market has potential for the growth of nitrogen-based fertilisers, commercial explosives for mining and other needs. The ammonia produced by CF will help in producing ammonium nitrate-based explosives, which will in turn support the mining industry in Peru.
The Peruvian Government hopes that development of petrochemical plants in Peru will generate additional investment in the manufacturing of products such as pulp, beverages, textiles and paper.
The Peruvian Government is providing a dynamic investment environment and a legal framework favourable to foreign investment. The US-Peru Trade Promotion Agreement is also fostering investment in the country.