APLA ’12: Natgas, reform to make Mexico petchems more competitive

11 November 2012 20:34  [Source: ICIS news]

RIO DE JANEIRO (ICIS)--Cheap natural gas from the US, a new political era and good demographics are allowing Mexico's chemical industry to become more competitive, the head of a trade group said on Sunday.

“The first 10 months of the year, the average price we paid for natural gas imported from the US was less than $3/MMBtu,” Miguel Benedetto Alexanderson, the president of Asociacion Nacional de la Industria Quimica (ANIQ).

He made his comments while speaking at the Latin American Petrochemical Association (APLA) annual meeting.

Mexico has been able to benefit from low natural gas prices in the US, which have fallen below $4/MMBtu from the double digits just five years ago.

US gas production increased 25% in five years to 65.3bn cubic feet/day feet in July, according to the US Energy Information Administration.

"Certainly this has greatly hiked our competitiveness in the chemical industry, helping us to attract investments and talent in Mexico,” Benedetto Alexanderson added.

Benedetto Alexanderson also said that energy reform should follow the nation's elections.

The recently elected president of Mexico, Enrique Pena Nieto, has a chance of reforming Mexico's energy laws, which could provide private companies a greater role in the nation's energy production.

Currently, state energy producer Pemex has a monopoly. However, Pena Nieto made reforming the nation's energy laws a priority during his presidential campaign.

Indeed, Benedetto Alexanderson said that along with Mexico’s population dynamics, the country has everything in place to be competitive in the global chemical industry.

Benedetto Alexanderson expects Mexico will play a bigger role in global trade as evidenced by being invited to be a part of the Trans-Pacific Partnership (TPP) talks.

In June, President Barack Obama announced that the US and the eight other countries negotiating the Trans-Pacific Partnership (TPP) Agreement have extended an invitation to Mexico to join the TPP negotiations.

The APLA conference ends on Tuesday.

By: Heather McGuire Doyle
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