08 October 2010 21:57 [Source: ICIS news]
By Joseph Chang
NEW YORK (ICIS)--Mexico’s major $2.5bn petrochemical and polymers project to be built by joint venture partners Braskem and Grupo Idesa is on track for start-up in early 2015, Idesa CEO Jose Luis Uriegas said on Friday.
“We are on track for start-up by early 2015. Before the end of this year we will have selected the technology for the cracker and polyethylene plants,” Uriegas said.
“We will have completed the FEED [front-end engineering and design] by mid 2011 and at this time also get financing commitments from banks. We want to execute the financing arrangement by the end of 2011 and then have construction in 2012-2014,” he added.
"By early 2015, the project should be on stream," he said.
The joint venture project, called Braskem Idesa and also known as Mexico’s Ethylene XXI project, is expected to cost $2.5bn (€1.8bn). The partners hope to have 70% of the cost financed with debt.
The project is comprised of a 1m tonne/year ethylene cracker and polyethylene (PE) plants with a capacity of 1m tonnes.
The previously planned breakdown of 450,000 tonnes of high density PE (HDPE), 350,000 tonnes of linear low density PE (LLDPE) and 200,000 tonnes of low density PE (LDPE) has yet to be finalised.
“The breakdown is not yet decided. It will be part of the market studies we will finish by the end of 2010," Uriegas said.
"Then we can confirm or adjust these figures," he said.
Discussions for Mexican polyvinyl chloride (PVC) producer Mexichem to buy 200,000 tonnes/year of ethylene from Braskem Idesa are currently off the table, but Uriegas would not rule out the future possibility.
“Right now we plan to use 100% of the ethylene for PE production. But if Mexichem is interested, we can discuss this,” he said.
The Ethylene XXI project, a revival of the failed Phoenix project in Mexico, received a major push forward with the announcement of Braskem and Idesa securing a feedstock contract with Mexican state-owned energy giant Petroleos Mexicanos (Pemex) in November 2009.
The announcement of Pemex agreeing to provide 66,000 bbl/day of ethane feedstock to the project was made in 2009 at the Latin American Petrochemical and Chemical Association (APLA) conference in Mexico City.
Most of the PE production volumes would be for the domestic market, which is short of the material. Mexico consumes around 1.6m tonnes of PE/year, of which 1m tonnes are imported, Uriegas said.
Braskem Idesa was officially started in April with Braskem having a 65% stake and Idesa 35%. There is an open invitation out to Pemex to take a minority position of no more than 10%, Uriegas said.
($1 = €0.72)
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