Braskem operates Ethylene XXI under a joint venture with the Mexican producer Grupo Idesa. Ethylene XXI has an ethane cracker, two high-density polyethylene (HDPE) plants and one low-density PE (LDPE) plant. These produce 1.05m tonnes/year of resin at Coatzacoalcos in Mexico.
Operating rates for PE at Ethylene XXI was 83% during the second quarter, down from 97% in the first quarter. With that, PE production was 217,374 tonnes, down 13% from 249,925 tonnes in the first quarter.
Run rates also fell at Ethylene XXI because the joint venture ran the complex particularly hard during the first quarter, said Fernando Musa, the CEO of Brazil-based Braskem. He made his comments during an earnings conference call.
As a result, the joint venture "decided to spend some time to fix and improve", Musa said.
At the same time, Pemex had some operational issues, especially around its fractionators, Musa said. This led to a reduction in ethane supplies for a few days.
Fractionators extract ethane and other products from a mixed stream of natural gas liquids (NGLs). All of Mexico's crackers rely on ethane as their main feedstock, including the one at Ethylene XXI.
Pemex had signed a long-term contract to supply ethane to Ethylene XXI. In the past, Pemex has honoured the terms of that contract, even as it had to restrict ethane supplies to its own crackers.
Musa did not discuss the terms of the contract or any other details of the contract during the conference call.
Regardless, Musa said the fractionators as well as the operational adjustments have been addressed. Utilisation rates at Ethylene XXI should rise and approach the levels the complex should be at given the course of its ramp-up stage.
"The first quarter was actually an outlier, in the sense that it is extremely rare that you start up a project of this size and complexity and reach the very high utilisation rates that we had," Musa said. "It was a coincidence of very, very positive scenarios all over, where everything worked perfectly well."
Still, the decline in PE operating rates at Ethylene XXI underscore the tight supplies of ethane in Mexico.
Pemex has struggled to meet domestic ethane demand. It produces a good portion of its NGLs from oil production via associated gas.
Oil production has fallen in Mexico, causing NGL output to also fall.
In the second quarter, Pemex produced 296,000 bbl of NGLs, tying the fourth quarter as its lowest level among the statistics maintained by ICIS. These go back to Q1 2010, when Pemex produced 388,000 bbl of NGLs.
Pictured above: Mexico's new Ethylene XXI complex (Braskem Idesa)