Mexichem VCM JV with Pemex may still go through – chairman

06 December 2012 23:04  [Source: ICIS news]

NEW YORK (ICIS)--Mexichem’s planned vinyl chloride monomer (VCM) joint venture with Mexico’s state-owned oil and gas company Pemex could still go through, the chairman of Mexichem said on Thursday.

“We are optimistic about the possibilities with Pemex but we are not desperate,” said Juan Pablo del Valle, chairman of Mexichem, on the sidelines of the Chemical Marketing & Economics Group meeting.

“Our priorities will only change once the [Pemex] board approves the JV. But it may come to a point in time when the window closes and a board approval may come too late,” he added.

Del Valle also noted that Pemex’s assets in Pajaritos, Mexico, that would be part of the venture, “are in very bad condition”.

A key factor in the chairman’s optimism is that Mexico’s new president, Enrique Pena Nieto, took office on 1 December, and has appointed new executives at Pemex.

Earlier, the outlook for the joint venture appeared less optimistic.

On 23 November, Mexichem said it was scrapping plans to complete the joint venture with Pemex because of continued delays from Pemex in approving the deal.

“We just wanted to push to make things happen. The deal is not dead,” del Valle said.

The proposed Mexichem/Pemex 60:40 joint venture, first announced in June 2011, has been waiting for Pemex board backing since it secured antimonopoly approval in October.

It includes a 230,000 tonne/year VCM plant, which would be expanded to 400,000 tonnes by 2015, a 200,000 tonne/year ethane cracker and a chlor-alkali plant in PajaritosMexico.

Pemex’s other two crackers in Morelos and Cangrejera were expected to supply additional ethylene for the venture.

On 27 November, Pemex insisted that the VCM joint venture was still possible and that a vote would take place in the next administration.

Earlier this year, Mexichem announced a memorandum of understanding (MoU) with US-based Occidental Chemical (OxyChem) to build a 500,000 tonne/year joint venture cracker at Ingleside, Texas.

Substantially all the ethylene would be used by OxyChem at Ingleside to produce around 1m tonnes/year of VCM to be shipped to Mexichem’s polyvinyl chloride (PVC) plants in Mexico and Colombia under a long-term supply agreement.

OxyChem and Mexichem aim to make a final decision on the cracker in the second quarter of 2013 following the completion of a feasibility study and basic engineering.

“Investing in the US complements our strength in Mexico,” said del Valle. “Shale gas will also transform our company and we’ll be in the US for a long time.”

Additional reporting by Simon West

By: Joseph Chang
+1 713 525 2653

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index

Related Articles