Petrochemicals

The petrochemicals segment takes part in Pampa’s vertical integration with gas operations. The Company’s goal is to maintain its position in the styrene market by capitalizing on current conditions and maximizing the use of its petrochemical raw materials. Our assets’ production covers a wide range of products, such as octane bases for gasoline, benzene, aromatic solvents, hexane and other hydrogenated paraffinic solvents, propellants for the cosmetic industry, monomer styrene, rubber and polystyrene for the domestic and foreign markets.

The petrochemicals market where Pampa competes is influenced by global supply and demand, which substantially impacts our results. Pampa is the only producer of monomer styrene, polystyrene, and elastomers in Argentina and the only integrated producer of goods ranging from oil and natural gas to plastics. As part of its efforts to integrate operations, it uses an important volume of its benzene production to obtain styrene and, in turn, a substantial volume of styrene to manufacture polystyrene and styrene butadiene rubber (‘SBR’).

The petrochemicals division consists of the Puerto General San Martín (‘PGSM’) integrated petrochemical complex, in the Province of Santa Fe, This complex has an annual production capacity of 50 thousand ton (‘kton’) of gases (liquefied petroleum gas – LPG -, which is used as raw material and propellant), 155 kton of aromatics, 290 kton of gasoline and refined products, 160 kton of styrene, 55 kton of SBR, 180 kton of ethylbenzene and 31 kton of ethylene. This segment also includes a polystyrene plant in Zárate, Province of Buenos Aires, with a production capacity of 65 kton. As of December 31, 2021, Pampa’s estimated share in the Argentine styrene, polystyrene and rubber markets amounted to 99%, 96% and 91%, respectively.

It is worth highlighting that exports in this segment are subject to an export duty which, under PEN Executive Order No. 1060/20, is 4.5% as from 2021 for most of its products (styrene, polystyrene, SBR and toluene), whereas others such as naphthas, aromatics and solvents’ export duties established by PEN Executive Order No. 488/20 remain in effect (8% throughout 2021 except for January, 3.1%, and February, 5.7%).

 

The following table shows the petrochemicals segment’s main indicators for fiscal years ended December 31, 2019 and 2020:

Sales volume (in thousand ton) 2020 2021
Styrene (incl. propylene and ethylene) 47 57
SBR 37 49
Polystyrene 47 58
Others 205 254
Sales destination(1) 2020 2021
Argentina 66% 63%
Outside Argentina 34% 37%

(1)Percentage calculated from sales in the Financial Statements.