Mexichem, OxyChem mull US cracker to supply Mexico firm with VCM

16 August 2012 18:01  [Source: ICIS news]

HOUSTON (ICIS)--Occidental Chemical (OxyChem) and Mexichem signed a memorandum of understanding to evaluate the creation of a joint venture to build a 500,000 tonne/year ethane cracker, the Mexico-based producer said on Thursday.

If the companies go through with the project, OxyChem will use nearly all of the ethylene as feedstock to produce 1m tonnes of vinyl chloride monomer (VCM) at its complex in Ingleside, Texas, Mexichem said.

OxyChem would then sell the VCM to Mexichem under a long-term contract.

The OxyChem agreement, combined with Mexichem's agreement with Pemex, would guarantee VCM supplies for the company's polyvinyl chloride (PVC) plants in Mexico, the company said.

Mexichem expects that a feasibility study and the basic engineering for the project could be finished in the second quarter of 2013, the company said.

If the project is deemed economically feasibility, the cracker could begin operations in 2016, Mexichem said.

The project is still subject to several conditions, including the approval of various definitive agreements, Mexichem said.

Mexichem is considering the joint venture because of the US feedstock advantage, brought on by the advent of shale gas, the company said.

By: Al Greenwood
+1 713 525 2645

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