Bolivia is targeting a May/June restart for its long-idled Bulo Bulo nitrogen plants and is forming a commission to investigate the paralyzed Bulo Bulo ammonia and urea facility, Senate President Andrónico Rodriguez announced early this week, according to a statement on his website that was issued following a visit to the troubled facility last weekend. The state-owned plant is the country’s only nitrogen fertilizer production facility.
Production at the plant, located in the country’s central Cochabamba department and operated by state-owned oil and gas company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), was halted in November 2019 (GM Jan. 31, 2020). Some of the reports at the time cited the production halt was due to a lack of imported additive formaldehyde. According to the Senate President’s statement this week, the decision to halt the plant was taken by Bolivia’s former Minister of Hydrocarbons Víctor Hugo Zamora Castedo.
The aim of the probe is to identify the damage that has been caused by the halt and mothballing of the plant, and to assess the grounds to initiate legal action against those deemed responsible.
The economic damage of the production stoppage according to the government’s initial analysis exceeds $160 million in unrealized urea sales in both the domestic and export markets. But Rodriguez believes the loss is some $250 million and the cost of reactivating the plant would exceed that amount, according to his statement
According to YPFB’s Executive President Wilson Zelaya, in a March 20 statement on YPFB’s website, the oil and gas company is paying around $70,000 every five days the plant is shut down to protect the catalysts from damage.
Zelaya said the shutdown of operations at Bulo Bulo was not done according to proper procedures, and resulted in some damage to equipment. He said an adequate hibernation of the plant was not undertaken, nor was proper maintenance performed during the 12 months and more of its shutdown.
The YPFB Executive President was among the group of Bolivian officials visiting the plant last weekend to verify the progress of plans to reactivate the facility. Other officials included the new Minister of Hydrocarbons Franklin Molina and Director of Bolivia’s National Hydrocarbons Agency (ANH) Germán Jiménez.
A schedule was planned in December for the relaunch of the plant, with a series of services contracts, including for specialists, following a decision by Bolivia’s new president to get the plant restarted, according to a March 20 statement on YPFB’s website, citing Molina. Bolivia’s new President, Luis Alberto Arce Catacora, took up office on Nov. 8, after a landslide win for the Movement for Socialism.
Molina believes the plant can be back in operation between May or June, “despite it being shut down for more than a year.”
Zelaya said in parallel with restoration work to get the plant up and running again, YPFB is now working with a commercial team “to close some commercial aspects so that in May or June when the plant starts to operate again we can quickly link the commercialization of the urea output.”
“We are going to supply the domestic market and also generate foreign exchange for the country with the production and reactivation of the plant,” said Molina in the YPFB statement.
Started up in September 2017, the plant has nameplate capacity of 2,100 mt/d of urea, but has suffered a series of operational problems since start-up.
Bolivia exported 305,040 mt of urea in 2019, and 21,769 mt in 2020, according to Trade Data Monitor statistics. The 2020 export volumes are understood to have come from inventory. As well as targeting domestic requirements, output from the plant has been sold to Brazil, Argentina, Paraguay, Uruguay, and Peru.
Last September, YPFB was reported to have launched tenders to conduct studies on how to reposition urea from the plant domestically and in neighboring countries (GM Sept. 11, 2020).