Volume 91 Issue 14 | pp. 28-29
Issue Date: April 8, 2013

Mexico: Firms Outline Petrochemical Plans At Conference

Department: Business
Keywords: petrochemicals, shale gas, ethylene, polyethylene, conferences

The emergence of shale gas has led to seven new multi-billion-dollar ethylene cracker projects, plus countless other smaller expansions, in the U.S. But the country’s neighbor to the south isn’t going to be left out of the building boom.

At the Latin American Petrochemical Networking Meeting, a gathering put on last month in Houston by the chemical consultancy Intelli­Chem, executives from Brazilian petrochemical maker Braskem and Mexican state oil company Pemex outlined the progress they are making in building much-needed petrochemical capacity in Mexico.

Braskem is a 75% partner, along with local chemical maker Idesa, in Ethylene XXI, a project to build a 1 million-metric-ton-per-year ethane-based ethylene steam cracker with three downstream polyethylene plants in the Mexican petrochemical hub of Coatzacoalcos.

The construction for the $4.5 billion project, according to Braskem Commercial Director Cleantho de Paiva Leite Filho, is on target to be completed by 2015. Some 5,000 construction workers are already on the site, and the company is hiring more hands at a clip of 800 people per month. Much of the site’s structural members have already been completed.

“We are going to actually be the first big project in this new wave of advantaged ethane in North America,” Filho told the audience. The plant’s competitiveness should be similar to facilities in the U.S., he noted, with feedstock prices set to the same benchmarks that U.S. Gulf Coast producers enjoy.

Moreover, Filho noted, the project will serve a Mexican market that is short of product. Of the 1.9 million metric tons of domestic polyethylene demand, two-thirds is satisfied with imports, mostly from the U.S.

Carlos Pani, commercial subdirector of Pemex, Braskem’s ethane supplier, gave an overview of Pemex’ investments in petrochemicals. Key among these is its $560 million joint venture with Mexican polyvinyl chloride producer Mexichem to double capacity at a vinyl chloride plant in Pajaritos, Mexico, to about 400,000 metric tons per year. Mexi­chem had been supplying chlorine and buying vinyl chloride from the plant for years when it was owned only by Pemex.

Additionally, Pemex is seeking a private-industry partner to build a 600,000-metric-ton-per-year ethylene glycol plant in Mexico. The plant, which would cost about $1.4 billion and come on-line in about four years, would displace imports of ethylene glycol into Mexico.

Pemex is also working on a number of smaller projects. It is spending $500 million to expand p-xylene and benzene capacity in Cangrejera. It is expanding ethylene oxide capacity in Morelos by 80,000 metric tons. And it is building a polymers applications laboratory in Mexico City.

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