Coatings World - March 2009

International Coatings Scene

LATIN AMERICA
BY CHARLES W. THURSTON
LATIN AMERICAN CORRESPONDENT
THURSTONCW@RODPUB.COM

Petrobras investment to boost
industrial coatings demand

Industrial
coatings
demand in
Brazil is set
to rise on
the heals of
Petrobras’
new invest-
ment plan.

Brazil’s state oil and petrochemicals company Petróleos Brasileiro S.A., or Petrobras has announced a massive $174 billion capital investment program over the next five years, which will bode well for suppliers of industrial paints and coatings. Producing more than two billion barrels of oil per day, Petrobras also currently operates 16 refineries, but plans are to both double oil production and refinery capacity over the coming decade. Construction on five new refineries within Brazil is expected to begin over the next five years.

Such investment should help increase sales of industrial coatings in Brazil, both for new and existing infrastructure. One recent U.S.-based company to win a coatings contract from Petrobras is Northern Technologies International Corp.’s (NTIC) Brazilian joint venture, Zerust Prevencao de Corrosao S.A., which will provide anti-corrosive coatings for the internal roof surfaces of oil storage tanks at Petrobras’ Reduc refinery in Rio de Janeiro. Reduc has an estimated 330 oil storage tanks thus far, however the complex is being expanded.

“Normally, an oil tank roof may need service every five years and a tank bottom every 10 years, but we try to help extend the service life to 25 or 30 years,” said Gene Friedman, the manager of global market development at NTIC’s Beachwood, OH, center for oil and gas industry applications.

The company has only been focusing on this sector for a few years now, Friedman said, but the Brazilian joint venture has been operating for many years serving the automotive and other sectors in that country. Zerust Prevencao de Corrosao, based in Sorocaba, in Sao Paulo state, also may target pipeline flanges and valves, as well as offshore drilling rigs in Brazil, which are application areas where NTIC is now expanding. Minneapolis-based NTIC has 29 joint ventures in place around the world, which are provided with design and technology support from

Beachwood for oil and gas applications. NTIC joint ventures elsewhere in Latin America are present in Argentina, Chile and Mexico.

Petrobras, which operates globally, is producing and refining oil in cooperation with a host of countries. One new $4 billion refinery is being built in northern Brazil at Suape, in Pernambuco state, with plans to refine oil from neighboring Venezuela’s Petroleos de Venezuela S.A., also a state-owned company. Petrobras also has a 50% share in the Pasadena refinery on the Houston Ship Channel, in Texas.

“Normally, an oil tank roof may need
service every five years and a tank
bottom every 10 years, but we try to
help extend the service life to 25 or 30
years,” said Gene Friedman.

While much of the $174 billion Petrobras investment plan is dedicated to oil exploration and development, downstream activities are scheduled to attract $47.8 billion, including refining, transportation, trade, petrochemicals and fertilizer business areas.

In the petrochemicals sector, for example, Petrobras is expanding its Rio de Janeiro-based Comperj complex with plans to produce 1.3 million metric tons per year of ethane, 881 thousand tons of propane and 608 thousand tons of benzene, apart from other chemical products and fuels, a company fact sheet related. Brazil is globally recognized for its large and innovative sugar-cane bagasse-based ethanol biofuel program.