Boston, MA -- (SBWIRE) -- 01/30/2015 -- Peru has the potential to develop a competitive, world-class petrochemicals facility, but progress has been slow with upstream gas production likely to take years to develop, according to BMI's latest Peru Petrochemicals report.

With proven gas reserves of over 400bcm, by 2019 Peru should have the ability to extract 1.5bcm of ethane for use in petrochemicals production. This would support the production of a large-scale petrochemicals complex with competitively priced output that could compete with the US's new shale-based units.

We caution though, that there remain a number of above-ground risks, including opposition from the indigenous population, continued security concerns, and a cumbersome bureaucracy. The key sticking point is pipeline infrastructure and the ability to overcome the strong challenge posed by new US capacity, fed by low-cost ethane derived from shale gas.

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Peru has a small and undeveloped petrochemicals market, in line with its narrow industrial base. As such, it remains a modest net importer of petrochemicals and any new facilities should transform it into a net exporter.

- The main focus of development over the medium-term will be fertiliser with capacities of 1.2mn tpa urea and 1.1mn tpa ammonia expected in H217.
- If PetroPeru secures partners and retains the interest of Brazil's Braskem in downstream operations, a petrochemicals complex could be established by 2019. Braskem has agreed in principle to the development of a joint venture (JV) complex with 1.2mn tpa ethylene and 1mn tpa polyethylene (PE). A business case is due to be presented in 2015 that will set out the time-frame for the project.
- Peru is currently devoid of olefins capacity and there is unlikely to be any improvement in the medium-term. However, progress is inching forward to build world-scale petrochemicals and fertiliser plants in the country, utilising its abundant gas resources. As such, BMI has raised Peru's Petrochemicals Risk/Reward Index score by 0.3 points to...

The Peru Petrochemicals Report has been researched at source, and features Business Monitor International (BMI)'s market assessment and independent forecasts for key petrochemicals sub-sectors. The report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing companies by products and services, sales, market share, investments, projects, partners and expansion strategies.

BMI's Peru Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Peruvian petrochemicals industry.

Key Benefits

- Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Peruvian petrochemicals market.
- Target business opportunities and risks in the Peruvian petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Peru.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI?s key industry forecasts, views and trend analysis, covering the petrochemicals markets, regulatory changes, major investments, projects and company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the petrochemicals sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:

- Energy: Oil production (?000 b/d), oil consumption (?000 b/d), net oil exports (?000 b/d), gas production (bcm), gas consumption (bcm), net gas exports (bcm), oil refinery capacity (?000 b/d).
- Petrochemicals: Ethylene capacity (?000 tpa), ethylene production (?000 tpa), ethylene consumption (?000 tpa), polyethylene capacity (?000 tpa), polypropylene capacity (?000 tpa), polyvinyl chloride capacity (?000 tpa), polyolefins consumption (?000 tpa).
- Oil Products Prices: Price forecasts for all major oil-based products (USD/bbl) at major global energy trading hubs.
- Economic: Nominal GDP (USDbn), real GDP growth (%), GDP per capita (USD), population (mn), unemployment (%), exchange rate (against USD).

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