Petrobras predicts return to the fertilizer sector with factory reopening in PR – 08/04/2023 – Market

Petrobras is starting to return to the fertilizer sector, abandoned by previous administrations. This Friday (4), the company reported that it is considering reopening a urea factory in Paraná and resuming work at another unit in Mato Grosso do Sul.

On another front, it negotiates with Unigel a partnership in two units in the Northeast region, which had been leased during the Jair Bolsonaro (PL) government. The president of the state company, Jean Paul Prates, stated that it is a strategic business, mainly targeting the energy transition.

The studies for the reopening of Ansa, the factory in Paraná, are in the final phase, informed the director of Industrial Processes and Products of the company, William França. The unit was closed in 2020, under union protests, on the grounds that it only caused losses.

This Friday, França defended that Ansa has great synergy with the Araucária refinery (PR) and that the first studies indicate that the reopening is feasible. The unit has the capacity to produce 2,000 tons of urea per day and also produces Arla 32, an agent that reduces emissions in diesel vehicles.

“It is a very important step because it represents the re-entry of Petrobras in the manufacture of fertilizers, which is a national guideline, and not only of Petrobras, after the invasion of Ukraine by Russia”, stated Prates, in an interview with journalists to detail the balance of the second trimester.

Another study in the segment contemplates the resumption of works on the fertilizer factory in Três Lagoas (MS), inaugurated during the Dilma Rousseff government and paralyzed since 2015 with 80% of the project completed. Petrobras even negotiated the unit with the Russian Acron, but talks were suspended in 2022.

França says that studies also indicate the feasibility of resuming the works, which would lead to a production capacity of 3.2 thousand tons of urea using natural gas transported by the Bolivia-Brazil Gas Pipeline as raw material.

Two other former Petrobras units, in Bahia and Sergipe, were leased to Unigel, with whom the state-owned company is negotiating a partnership that would include the production of green hydrogen. “Faced with the new willingness to analyze the issue of fertilizers, we are negotiating to join forces with them”, stated França.

The supply of fertilizers for agribusiness became critical after the start of the war in Ukraine. Brazil imports about 85% of its demand for fertilizers and about a quarter of that total came from Russia.

The Lula government’s fertilizer production expansion program provided for another Petrobras unit, in Uberaba (MG), but the works were also paralyzed after the start of Operation Lava Jato. Afterwards, the state-owned company decided to leave the segment.

The return to segments abandoned by previous administrations also includes energy generation: Petrobras is considering participating in the next government thermoelectric auction with a unit installed in the former Comperj (Rio e Janeiro Petrochemical Complex).

According to the company’s Director of Energy Transition and Sustainability, Maurício Tolmasquim, the deal depends, first, on assessing the feasibility of the plant and, then, on winning the auction.

The state-owned company also took steps to resume investment in refining, by launching this sixth tender for the second phase of the Abreu e Lima Refinery, in Pernambuco, which will expand local capacity to 260,000 barrels per day.

The first phase has been in operation since 2014 and was the subject of investigations by Operation Lava Jato. The resumption of works was approved during the Bolsonaro government, which unsuccessfully tried to sell the unit.