APLA ’09: Mexichem eyes ethylene from Braskem’s Mexico project

09 November 2009 22:37  [Source: ICIS news]

MEXICO CITY (ICIS news)--Mexican polyvinyl chloride (PVC) producer Mexichem is in discussions with Braskem and Idesa to purchase ethylene from their proposed joint venture complex in Coatzacoalcos, Mexico, Mexichem’s chief executive said on Monday.

The discussion to purchase 200,000 tonnes/year of ethylene from the joint venture is part of Mexichem’s plans to increase its vinyl chloride monomer (VCM) production and become vertically integrated in the production of PVC sheets, Ricardo Gutierrez said. Mexichem currently imports VCM from the US, he said.

Brazilian chemicals major Braskem and Mexican producer Idesa are planning a 1m tonne/year ethylene plant plus polyethylene (PE) units based on ethane gas purchased from Mexico’s state-owned Petroleos Mexicanos (Pemex). The project, known as Ethylene XXI, is scheduled to start up in 2015.

Mexichem had considered investing in Ethylene XXI, but now favours a long-term ethylene supply contract, Gutierrez said. “We prefer to be in this project as a customer,” he told ICIS news on the sidelines of the 29th Latin American Petrochemical Association (APLA) annual meeting in Mexico.

An ethylene supply agreement with Braskem and Idesa would enable Mexichem to build a new 600,000 tonne/year VCM plant in Coatzacoalcos, he said.

Mexichem is also in discussions with Pemex regarding a retrofit of Pemex’s VCM plant at the site, said Rafael Davalos, director general of Mexichem’s chlorine/vinyl chain. Mexichem would invest $80m (€54m) in the retrofit of the plant, which would supply Mexichem’s PVC production, he said.

The retrofit, using Oxy Vinyls technology, would increase VCM output from the Pemex plant from current levels of about 200,000 tonnes/year to 400,000 tonnes/year by the end of 2012, Davalos said.

Mexichem calculates its VCM requirements at 1m tonne/year, assuming it succeeds in its planned acquisition of Mexican PVC producer Policyd. Mexichem is engaged in a battle to acquire Policyd from industrial group Cydsa following objections from the Mexican antimonopoly authorities.

“We are still working with the antitrust authorities about the possibility to get their approval,” Gutierrez said.

Without Policyd, Mexichem requires about 750,000 tonnes/year of VCM, he added.

($1 = €0.67)

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By: Anna Jagger
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