Mexico Ethylene XXI ethane supply is assured – CEO

Ethylene XXI recently celebrated its inauguration. Executives said the complex’s supply of ethane is assured, even as supplies of the feedstock are declining in Mexico. Source: Braskem Idesa

COATZACOALCOS, Mexico (ICIS)–The head of Braskem Idesa stressed on Wednesday that the company’s new Ethylene XXI complex has an assured supply of ethane to feed its ethylene and polyethylene (PE) production.

Ethylene XXI is in Coatzacoalcos, Veracruz state, in Mexico, and it includes a 1.05m tonne/year ethane cracker, 750,000 tonnes/year of high density PE (HDPE) capacity and a 300,000 tonne/year low density PE (LDPE) unit.

Ethylene XXI receives ethane from state producer Pemex under a 20-year contract. The company said it is using 55,000 bbl/day of the 66,000 bbl/day contracted amount.

“The supply for Braskem Idesa, it is assured,” said Roberto Bischoff, head of Braskem Idesa. He made his comments during a grand-opening ceremony at the complex. “We do not consider any other alternative other than that.”

Questions about ethane came after Pemex had experienced problems with its PE production. Because of a shortage of ethane, Pemex’s PE production was hampered.

However, the declining production of PE at Pemex has nothing to do with the start-up of Ethylene XXI, said Jose Luis Uriegas, general director of Grupo Idesa, one of the two partners in the Braskem Idesa joint venture.

“The ethane production has been declining over the last two years,” Uriegas said. One of the reasons behind the decline is lower crude production in Mexico. Pemex obtains much of its ethane from associated gas, a by-product of oil production. 

In addition, Pemex is reinjecting associated gas into its existing oil wells to boost production, he said. The chemical industry is working with Pemex on ways to increase oil production without reinjecting so much gas back into the wells.

The start-up of Ethylene XXI follows a multi-year pre-marketing campaign in Mexico, in which the joint venture had to build a position in the country from scratch. Braskem Idesa is now selling 50% of its capacity to the domestic market, with the rest being exported.

Long-term, Braskem Idesa wants to focus on the domestic market, executives said. So far, the company have over 350 clients in Mexico. It has exported product to the Middle East, China, Central America, South America, Europe and the US.