APLA ’18: New Mexican president could boost ethane output

CANCUN, Mexico (ICIS)–Mexico’s president elect has consistently stressed the need to boost oil production and energy investment in the country, and this could lead to any number of projects required to increase ethane supplies, the head of Grupo Idesa said.

Right now, Mexico does not produce enough ethane to keep all of its crackers running at full capacity, the consequence of the nation’s long decline in oil production.

Mexico gets most of its ethane from the associated gas produced at the country’s oil wells.

The ethane shortage is affecting Idesa through its minority stake in the Ethylene XXI complex as well as through its ethylene oxide (EO) production.

Braskem Idesa’s Ethylene XXI has been receiving 80-85% of its ethane, said Jose Uriegas, CEO of Grupo Idesa.

Uriegas made his comments on the sidelines of the annual meeting of the Latin American Petrochemical Association (APLA).

For EO, Idesa relies on ethylene from Pemex’s crackers, and these have not been running at full capacity because of the shortage in ethane.

The country has several options to make more ethane available to its crackers, Uriegas said.

Mexico is already receiving waterborne imports of ethane from the US, and the country could increase its capacity to handle more shipments, he said.

Pemex could increase production of wet gas, which has large amounts of ethane.

Pemex’s natural-gas processing plants could be upgraded to extract more ethane. Many of these plants were designed to extract a maximum of 70% of the ethane from raw gas.

Uriegas said recovery rates could be increased to at least 90% with more investments.

Better maintenance for the country’s fractionators and processing plants could also improve ethane recovery.

Additional infrastructure for Mexico’s offshore oil wells could recover the gas that is currently being flared, he said.

Increasing energy investments in general has been a priority of Mexico’s new president, Andres Manuel Lopez Obrador (AMLO), both during his campaign and after his victory.

Less than a month after the election, AMLO proposed a multi-billion-dollar plan to increase crude output, rehabilitate all six of Mexico’s refineries and build a new one in Tabasco state.

The APLA annual meeting runs through Tuesday.

Interview article by Al Greenwood