Braskem Idesa declares FM after losing gas supplies in Mexico

Author: Renato Frimm

2020/12/07

HOUSTON(ICIS)--Braskem Idesa declared force majeure after it was cut off from natural gas supplies by Mexico’s National Centre for Control of Natural Gas (CENAGAS).

Braskem Idesa is the main domestic producer of polyethylene (PE) in Mexico. Its Ethylene XXI complex has installed capacity of 1.05m tonnes/year of ethylene, in addition to 750,000 tonnes/year of high-density polyethylene (HDPE) and 300,000 tonnes/year of low-density polyethylene (LDPE).

In the letter dated 3 December, Braskem Idesa said the decision by CENAGAS violates the company’s rights and multiple legal provisions.

The letter further states that the company will act in compliance with its fiduciary and corporate responsibilities and will take necessary actions that exist within the legal framework to defend its rights and assets.

It remains unclear how long natural gas supply will be off, although a source close to the company said it is working on a solution.

(The article was updated on 7 January 2021 to correct the LDPE capacity of Ethylene XXI to 300,000 tonnes/year instead of 350,000 tonnes/year.)