Petrobas, Brazil’s state-run oil company has signed a letter of intent to conduct studies over the next six months to determine the possibility of building fertilizer and liquefied natural gas regasification plants in Rio Grande do Sul state. The letter of intent was signed by Petrobas, as well as Hyundai’s bulk-carrier division and Samsung’s machinery and ships division.
In order to capitalize on growing natural gas production in Brazil, Petrobas has expanded its use of floating LNG regasification plants which allows imports from overseas and for exports. To meet the increasing demand from the country’s agriculture sector, Petrobas is also building natural gas-based fertilizer plants as it currently imports more than half of its fertilizer needs. The agribusiness sector in Brazel has been a major contributor to the trade surplus but high costs to import fertilizer have hurt the profit margins of local farmers. The Brazilian government has been pressuring major fertilizer companies for an increase production to lower costs.