Mexico, Brazil possess potential advantages for petchem producers

20 March 2013 18:59  [Source: ICIS news]

HOUSTON (ICIS)--Mexico and Brazil have the ability to lead the way in a new century of Latin America petrochemical production, the CEO of Mexico’s Grupo IDESA said on Wednesday.

Mexico is well positioned thanks to its proximity and pipeline attachments to the US, as well as the fourth-most shale gas reserves in the world according to the US Energy Information Agency (EIA), said Jose Luis Uriegas during a presentation at the IHS World Petrochemical Conference.

Mexico currently has 1.4m tonnes/year of ethylene capacity, a figure set to rise to 2.43m tonnes/year by 2016 when the Ethylene XXI complex comes online in the latter half of 2015, he said. Its feedstock will be natural gas.

Brazil has 14bn bbl of proven oil reserves, as well as the 10th largest shale gas reserves in the world, according to the EIA. That shale gas could help make its ethylene production more competitive in the coming years.

The country currently has 3.97m tonnes/year of ethylene capacity, with most of it being produced from naphtha. With naphtha prices tied to crude oil prices, Brazil’s ethylene production is at a disadvantage to North American production via shale gas feedstock.

Investments in technology, infrastructure and logistics will be needed for Mexico’s and Brazil’s petrochemical industries to succeed in Latin America in the coming years, Uriegas said.

“It’s a region that is large and is growing fast,” he said.

Grupo IDESA, headquartered in Mexico City, is a major producer of petrochemicals and logistics systems for Mexico and Latin America.

The IHS World Petrochemical Conference continues through Thursday.

By: Jeremy Pafford
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