Braskem Idesa sets ‘fast track’ and long-term plans to import US ethane, will expand cracker by end 2021

Author: Joseph Chang

2019/10/01

NEW YORK (ICIS)--Braskem Idesa will take a novel approach in sourcing US ethane for its 1.05m tonne/year cracker and polyethylene (PE) units in Coatzacoalcos, Mexico with a “fast track approach” involving trucks for the last mile, the CEO of joint venture partner Grupo Idesa said on Tuesday.

Braskem Idesa has a 1.05m tonne/year ethane cracker and polyethylene (PE) units in Coatzacoalcos, Mexico.

The Braskem Idesa cracker has been receiving around 75-80% of its ethane feedstock requirements from Mexico state-owned oil and gas producer Pemex as gas production in the southern part of the country has been less than expected, said Jose Luis Uriegas, CEO of Grupo Idesa.

“We are preparing to start imports of ethane in November. In our fast track plan, we will have a terminal at Coatzacoalcos Port receiving ethane in liquid form from the US at a competitive price. Then we will move it in liquid form by truck from the port to the plant where we will re-gasify it,” said Uriegas in an interview with ICIS.

The Braskem Idesa joint venture (75% Braskem, 25% Idesa) has already been building the infrastructure for this “fast track” phase, which will allow it to import 20-25% of its ethane feedstock needs so it can run its cracker at close to 100% in 2020, he noted.

The ethane shipped from the US would move from vessels to Coatzacoalcos Port to be unloaded into large bullet tanks. From there the ethane would be loaded onto trucks to Braskem Idesa’s cracker less than 10km away.

The vessels that can move natural gas liquids (NGL) by truck cool the product to around -180 degrees Celsius, whereas ethane needs to be cooled to about -90 degrees Celsius, said the CEO.

“The company that will move the ethane is very experienced in moving NGL [natural gas liquids] in trucks at short distances. The distance is less than 10km and through a very safe route,” said Uriegas.

“The logistics are slightly more expensive, but it is always better to be able to run the cracker at 100%,” he added.

LONG-TERM ETHANE SOLUTION

However, the “fast track” ethane plan will be supplanted by a long-term solution.

Braskem Idesa’s long-term plan involves building a proper ethane import terminal at Coatzacoalcos Port, which would include one or two very large tanks capable of importing at least 50,000 bbl/day of ethane.

All of the crackers in Coatzacoalcos, including those of Pemex, have the capacity to consume around 130,000 bbl/day of ethane, he noted.

The terminal, which would be built and operated by Braskem Idesa, would receive liquid ethane and then re-gasify it at the terminal, moving it by pipeline about 8km to the cracker site, said Uriegas.

Braskem Idesa is working on the permitting process for the ethane import terminal and expects to start construction in early 2020 for completion in late 2021 or early 2022, he added.

While Uriegas is bullish about Pemex’s ability to increase oil and gas production for petrochemical feedstock in the medium and long term, a stop-gap solution is needed to maximise cracker productivity.

“It is good the government is putting a clear priority on the energy sector as they are dedicating serious funds to increase production of oil and gas,” said Uriegas.

“However, in the next three years we are not counting on increased volumes, so we are planning ethane imports,” he added.

EXPANSION OF CRACKER CAPACITY

And in conjunction with the long-term increase in ethane supply from the US, Braskem Idesa plans to expand ethylene capacity at its cracker by 10-20% through debottlenecking by late 2021, said the CEO.

However, there are no plans to increase PE capacity as its units can produce beyond nameplate capacity and thus can offtake production from the expanded cracker, Uriegas said.

Downstream from the 1.05m tonne/year ethane cracker, Braskem Idesa has capacities of 750,000 tonnes/year of high density PE (HDPE) and 350,000 tonnes/year of low density PE (LDPE).

IDESA TO BOOST FUEL IMPORTS

Separate from the Braskem Idesa plans, Grupo Idesa itself is in the process of expanding its terminal in Veracruz, Mexico to double its gasoline and diesel import capacity. Tank capacity will be doubled to around 100,000 cubic metres (cbm) by late 2020, said Uriegas.

Interview article by Joseph Chang