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LATIN AMERICAN PETCOKE DEMAND And the effects of the Argentinean Energy Crisis Álvaro Güell

LATIN AMERICAN PETCOKE DEMAND And the effects of the Argentinean Energy Crisis Álvaro Güell Independent Consultant Pto. Alcudia Ltda. Mc Closkey’s 2nd Annual Petcoke Conference Houston, USA, 19 – 20 July, 2004.

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LATIN AMERICAN PETCOKE DEMAND And the effects of the Argentinean Energy Crisis Álvaro Güell

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  1. LATIN AMERICAN PETCOKE DEMAND • And the effects of the Argentinean Energy Crisis • Álvaro Güell • Independent Consultant • Pto. Alcudia Ltda. • Mc Closkey’s 2nd Annual Petcoke Conference • Houston, USA, 19 – 20 July, 2004

  2. Latin American petcoke import, general considerations for a short time forecast.Thermal coal and petcoke imports within the eight (out of ten) Latin American countries were studied. A forecast for 2004 and 2005 thermal coal and petcoke consumption are given. Finally, and based upon technical, environmental end economic restrictions, a potential maximum requirement of petcoke for Latin America will also be given for the mid term.

  3. Argentina, Background.For the ongoing 2004 winter, Argentina will have a shortage of some 15 Million cubic meters of natural gas per day, close to 10% to its total 144 Million cubic meters actual production. The previous figures strongly depend upon hydroelectric availability, together with weather and temperature within the metropolitan Buenos Aires area.As a result of the supply cuts, effective from mid March this year, some Cement companies have been in the market for petcoke and coal, and some sales have being reported, also CTSN has already fixed ten handymax cargoes for its 2004 operation.

  4. Table 1.Argentinean thermal coal and petcoke requirements, metric tons per annum, 2003 historic, 2004 projected, 2005 forecast.

  5. Brazil, Background.Brazil has not being dramatically affected by the Argentinean natural gas crisis; they import less than 2.0 million cubic meters per day of natural gas from Argentina.Data from every Cement plant has being gathered and its consumption projected. Brazilian cement mills are at nearly full petcoke load.

  6. Table 2. Brazilian thermal coal and petcoke requirements, metric tons per annum, 2003 historic, 2004 projected, 2005 forecast.

  7. Chile, Background.Interfuel competition between natural gas and Thermal coal and petcoke is under way, for most thermoelectric generators, Cement mills and other industries since 1997.Total Industrial use of coal has dropped 80% 1997. Cement mills have not being seriously affectedThermoelectric`s imports of thermal coal and petcoke has dropped by nearly 60%.New Combined Cycle companies lobby against the, as of 1999, normal use of Petcoke in coal blends. This kept petcoke out of the Chilean market for almost three years.

  8. Since 2002 companies have being allowed to use petcoke again.A new softening of present petcoke use restrictions is not expected.The immediate effect of Argentinean natural gas export cuts, the low availability of hydroelectricity and the increase of total electricity demand by 7.2% during the first five month of 2004, has increase total Chilean thermal coal and petcoke requirement from a total of 3.4 million mt in 2003 to projected imports of some 5.9 million mt by 2005.The increase in petcoke imports move from 270,000 mt in 2003 to a forecasted 1.1 million mt by 2005.

  9. Table 3. Chilean thermal coal and petcoke requirements, metric tons per annum, 2003 historic, 2004 projected, 2005 forecast

  10. Colombia Background.Colombia presently has 943 MW of coal fired thermoelectric units, burning only coals produced by mine mouth suppliers.Projected total petcoke consumption is a matter of net back price, where many aspects of cost are involved. Colombia does not produce petcoke.It is projected a status quo in their thermal coal and petcoke consumption for 2005 in comparison to years 2003 and 2004.

  11. Table 4. Colombian thermal coal and petcoke requirements, metric tons per annum, 2003 historic, 2004 projected, 2005 forecast

  12. PERU, Background.Cementos Lima and Andino group has already discharged a first 35.000 mt test cargo. Cementos Sur and Yura group received the first test cargo end of June. Cementos Pacasmayo and Selva have not yet decided when to carry out a first petcoke test.Due to actual high prices and given the high quality coals that Peruvian cement plants import, there are important incentives for a more aggressively approach to the use of petcoke.Pipeline completion, connecting gas reserves of Camisea and Lima by mid 2004, may have some effect over the demand of petcoke in central Peru.

  13. Table 5. Peruvian thermal coal and petcoke requirements, metric tons per annum, 2003 historic, 2004 projected, 2005 forecast.

  14. Ecuador, Uruguay and VenezuelaTable 6. Equator, Uruguay and Venezuelan thermal coal and petcoke requirements, metric tons per annum, 2003 historic, 2004 projected, 2005 forecast

  15. Total Latin American thermal coal and petcoke requirementsmetric tons per annum, 2003 historic, 2004 projected, 2005 forecast.

  16. Latin American total petcoke mid term potential.The technical and environmental constrains are only restrictions to a larger consumption of petcoke within the region.Comparing technical and enviromental petcoke use limits, definitively the environmental one results in a lower percentage of petcoke in blends. Taking previous technical and environmental restrictions for every particular User results in a total potential use of petcoke.

  17. Figure 1 and Table 8: Total potential of petcoke imports into the different Latin American Countries and their Potential import forecast

  18. Figure 2: Historic imports of thermal coal and petcoke in 2003, projected total imports for 2004, forecast for 2005 and potential imports of petcoke in Latin America for the mid term.

  19. CONCLUTIONS Regardless important uncertainties, like; 2004/2006 Argentinean gas crisis, affecting also Chilean energy matrix Peruvian Camisea gas projects an it effect over solid fuels consumption Strong energy demand within the region v/s lack of new power investments. High hydroelectric dependence for a tight supply market and a 2004 low hydro availability

  20. It can be concluded that; The region’s thermoelectric and Cement sector are framed in a very active and positive interfuels competition. As a result of deregulated markets, the companies will continue focusing their operations to get the lowest possible fuel cost. Petcoke imports will increase from 3.448.000 mt in 2003 to a 4.149.000, almost committed, for 2004 and a forecasted 5.092.000 for 2005. Total petcoke potential, within technical an environmental constrains, is 7.247.400 for the mid term

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