Brazil’s state-owned oil major Petrobras and polymers producer Braskem have agreed to long-term feedstock supply contracts worth $17.8 billion after years of negotiations, the two companies said late on Thursday.

The new agreements — long sought by Braskem as the company seeks to switch its predominantly naphtha-based operations in Brazil to more competitive natural gas liquids (NGLs) feedstocks such as ethane — will replace and expand current arrangements set to expire at the end of 2025.

The largest portion of the deal, worth $11.3 billion, covers the supply of petrochemical naphtha to Braskem plants in São Paulo, Bahia and Rio Grande do Sul states, including Braskem’s flagship Triunfo complex in Rio Grande do Sul.

The five-year contract, effective 1 January 2026, links prices to international naphtha benchmarks and includes minimum monthly offtake volumes.

Petrobras said total naphtha volumes under the contracts could reach 4.116 million tonnes in 2026, rising to 4.316 million tonnes by 2030, with additional quantities subject to negotiation.

Braskem is partly owned by Petrobras. As Braskem’s largest shareholder Novonor appears set to dispose of its stake in the polymers producer, Petrobras has taken positions to gain more influence at Braskem post-divestment, according to Petrobras’ chief executive earlier this week.

ETHANE SUPPLY UNLOCKS EXPANSION
A second contract, worth $5.6 billion, covers the supply of NGLs ethane and propane, as well as hydrogen, to Braskem operations at Duque de Caxias facilities in Rio de Janeiro state over an 11-year period starting in 2026.

Braskem management has repeatedly said the company could easily expand its Duque de Caxias facilities provided Petrobras — the dominant oil and gas player in the Brazilian market — supplied the necessary feedstock.

As Braskem takes the first steps to expand those facilities, the two companies appeared close to a deal in June 2025, though finalizing details took six additional months.

At the time, Braskem said a feedstock supply deal with Petrobras could unlock nearly $800 million in investments to expand the Rio de Janeiro complex.

From 2026 to 2028, the agreement maintains the current contracted volume of 580,000 tonnes of ethylene equivalent per year, supplied from Petrobras’ Duque de Caxias refinery, known as Reduc, according to Petrobras.

From 2029 through 2036, contracted volumes will increase significantly to 725,000 tonnes of ethylene equivalent per year to feed Braskem’s planned expansion at Duque de Caxias. Supply will come from the nearby Petrobras-operated Reduc refinery and/or from Petrobras’ Boaventura complex.

Petrobras also signed propylene supply contracts with Braskem worth an estimated $940 million over five years, effective in May 2026.

The agreements cover deliveries from the Reduc, Recap and Refap refineries, with annual volumes of up to 140,000 tonnes from Recap, 100,000 tonnes from Reduc and gradually rising volumes at Refap, reaching 60,000 tonnes per year by the contract’s end.
Source: By Jonathan Lopez, ICIS, https://www.icis.com/explore/resources/news/2025/12/19/11165718/brazil-s-petrobras-braskem-sign-18-billion-long-term-naphtha-ngls-supply-deals/