APLA ’18: Braskem Idesa ethane contract with Mexico’s Pemex ‘robust’ – Idesa CEO

Joseph Chang

11-Nov-2018

CANCUN, Mexico (ICIS)–Braskem Idesa’s supply contract with Mexico’s Pemex is solid and not likely to be changed, the CEO of Grupo Idesa said on Sunday.

“The government likes the investment we made [in Braskem Idesa]. The contract is very robust. There is no signal at all from the government or from Pemex questioning it. They realise this is a huge investment with all the benefits for Mexico,” said Jose Luis Uriegas, CEO of Grupo Idesa.

Uriegas spoke to ICIS on the sidelines of the annual meeting of the Latin American Petrochemical Association (APLA).

One major benefit to Mexico is that $1.2bn-$1.4bn of annual polyethylene (PE) imports have been substituted by local product produced by Braskem Idesa in Coatzacoalcos, Mexico, he added.

In previous media reports, officials in the coming new administration in Mexico had indicated it would review the ethane supply contract with Braskem Idesa.

Braskem Idesa, which consists of a 1.05m tonne/year ethane cracker and downstream PE units of the same capacity, is 75% owned by Brazil-based Braskem and 25% by Mexico’s Idesa.

While Mexico is not producing enough ethane natural gas liquid (NGL) feedstock for Pemex and Braskem Idesa’s downstream PE and ethylene glycol (EG) facilities, supply has been “reasonably good” with Pemex meeting 80-85% of its requirements to Braskem Idesa, said Uriegas.

The new government has indicated that additional investments would be directed to modernising and upgrading the energy sector.

Braskem Idesa has also created substantial jobs in the south and southeast of Mexico where they are particularly needed, noted Uriegas.

“These investments are the ones that create jobs and have a positive impact in that region where you see less economic activity,” he said.

The APLA annual meeting runs through Tuesday.

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