APLA ’23: Braskem Idesa prepares for terminal, turnaround before expansion – CEO

SAO PAULO (ICIS)–Braskem Idesa is preparing for the start-up of its new joint venture (JV) ethane terminal along with a major turnaround at its Ethylene XXI cracker and polyethylene (PE) complex in Coatzacoalcos, Mexico in 2025, ahead of a planned expansion of ethylene capacity, its CEO said.

The 1.05m tonne/year ethane cracker is running at around 80% capacity with higher than anticipated ethane feedstock volumes from Pemex, Mexico’s state-run energy company, as well as supplemental ethane from its “fast track” ethane import project where ethane is imported and shipped to the cracker by truck.

Downstream capacities include 750,000 tonnes/year of high density PE (HDPE) and 300,000 tonnes/year of low density polyethylene (LDPE).

Braskem Idesa is receiving over 35,000 bbl/day of ethane from Pemex, above Pemex’s minimum of 30,000 bbl/day contractual obligation, and over 20,000 bbl/day from its fast track project. Pemex itself is producing around 50,000 bbl/day of ethane, the CEO said.

“They are not consuming ethane at higher amounts at their petrochemical plants so in the end there is more ethane available for us,” said Stefan Lepecki, CEO of Braskem Idesa, in an interview with ICIS.

TERMINAL OPERATIONS SET FOR 2025
The 50/50 JV Terminal Quimica Puerto Mexico (TQPM) owned by Braskem and Advario is 48% complete and expected to be fully complete by the end of 2024, which would allow operations to start in 2025.

The terminal will include a 10km pipeline, at a cost of $450m, and provide up to 80,000 bbl/day of ethane feedstock to Braskem Idesa’s Ethylene XXI complex. In early November, Braskem Idesa announced it had raised $408m in financing to finish construction of the terminal.

“Currently to operate at 100% of capacity, we need around 64,000 bbl/day of ethane. So if we receive 80,000 bbl/day, this difference will be available for a potential expansion [of ethylene capacity],” said Lepecki.

Braskem Idesa plans to add a seventh ethylene furnace to the complex, boosting capacity by around 20%. It already has enough PE capacity downstream to handle the potential increase in ethylene as its listed PE capacity figures are constrained by the availability of ethylene from the cracker.

“This terminal is kind of an insurance for us, but we still expect to receive some ethane from Pemex even after the completion of the terminal. That is the most competitive ethane for us – the local ethane,” said Lepecki.

After completion of the terminal, he expects to receive less than the current amount of ethane from Pemex – but this amount is uncertain as Pemex may raise its cracker and PE operating rates, he noted.

Once the terminal is complete, Pemex will not be required to send ethane to Braskem Idesa, but the latter has right of first refusal for any excess ethane Pemex itself does not use.

MAJOR TURNAROUND IN MID-2025
The next step for Braskem Idesa is a big turnaround at the Ethylene XXI complex which would start in June and last 40 days through July, he said.

“At this moment, our focus and priority is really to conclude the construction of the terminal and to prepare the facilities, process and people for the major turnaround. There’s huge work to be done on that with $80m in investment and 40 days of shutdown,” said Lepecki.

“We need to prepare our inventories, and all the projects and maintenance processes with service providers. It’s important to be very focused at this moment for the next two years on the terminal and turnaround. Then right after that we start thinking about the expansion,” he added.

CRACKER EXPANSION TO COME
A final investment decision (FID) has yet to be made on the cracker expansion, he said.

However, Braskem Idesa has already prepared the foundation for the seventh furnace and added some equipment, allowing the expansion to proceed at lower cost, he pointed out.

“This is a no-brainer investment. But again, it’s not the priority at the moment,” said Lepecki.

While the PE market is going through a rough stretch with massive overcapacity form expansions in the US and Asia, the executive sees 2024 being a transition period from the bottom with a stronger upturn in 2025 as capacity additions slow.

RESILIENCE FROM FUTURE OUTAGES
The Ethylene XXI complex had an outage in September from external electrical issues, but has recovered and Braskem Idesa has now has taken measures to prevent this in the future, he noted.

“We had an issue with the national grid with a short circuit in the external system that impacted a group of plants in the region, but we’ve recovered and the plants are running well,” said Lepecki.

“It’s concerning to have this kind of issue and we’ve been dealing with issues in the external grid, but we’ve now improved our control systems and protections to avoid this kind of disturbance at our plants,” he added.

Additional reporting by Al Greenwood and Jonathan Lopez

Interview article by Joseph Chang