By JEFF FICK
Brazilian state-run oil company Petrobras said Friday that it had signed a letter of intent to study the feasibility of building fertilizer and liquefied-natural-gas, or LNG, regasification plants in Rio Grande do Sul state.
The studies will be conducted over the next six months, Petrobras said.
The letter of intent was signed by Petrobras, Samsung's machinery and ships division and Hyundai's bulk-carrier division.
Petrobras has been expanding its use of floating LNG regasification plants in order to capitalize on growing natural-gas production in Brazil.
The ships not only allow Petrobras to import cheap natural gas from overseas, but also allow for exports.
The federal oil company is also building natural gas-based fertilizer plants to meet growing demand from Brazil's massive agricultural sector.
Brazil currently imports more than half its fertilizer needs.
The government has been pressuring major fertilizer companies to increase production in an attempt to lower costs for farmers.
Brazil's agribusiness sector has been a major contributor to the country's trade surplus over the years, but high fertilizer import costs have hurt local farmers' profit margins.
Dow Jones Newswires