APLA ’17: Mexico may begin ethane imports in Dec

RIO DE JANEIRO, Brazil (ICIS)–Mexico could begin importing ethane from the US in December at the port of Pajaritos near the country’s petrochemical hub in Coatzacoalcos, the CEO of Grupo Idesa said.

Mexico relies on ethane as a feedstock for all of its crackers. The country has a shortage of the material, which has caused state producer Pemex to run its crackers at rates well below capacity.

Pemex is under contract to supply ethane to Braskem Idesa’s Ethylene XXI project. Pemex has been honouring the terms of the agreement even has its own crackers have struggled to obtain enough feedstock.

Any imports should help address this shortage. Pemex has been modifying an ethylene tank in the port of Pajaritos so it can receive ethane, said Jose Uriegas, CEO of Grupo Idesa. He made his comments on the eve of the APLA Annual Meeting, which began on Sunday.

Uriegas expects the ethane imports to arrive in December from the US. Those imports should allow Pemex to run its crackers at rates of 50-70%.

Meanwhile, Pemex and the Mexican government are working on longer-term solutions to provide the country’s plants with enough ethane.

Mexico’s midstream infrastructure was not designed to extract the maximum amount of ethane from the gas stream because the country once had a surplus of ethane. In the medium term, Pemex will work on increasing ethane extraction rates, Uriegas said.

Another step involves reducing the amount of nitrogen in Mexico’s wet gas, he said. Right now, it has a large amount, and reducing it would make more ethane available.

Mexico’s recent energy reforms could reverse the nation’s decline in oil production, providing more associated gas from which Pemex can extract ethane.

This will not happen immediately, Uriegas said. But in three to five years, Mexico should start seeing the results of new energy producers entering the market.

Already, some notable oil discoveries have been announced, both by new entrants into the market as well as by Pemex.

The APLA Annual Meeting runs through Tuesday.

Interview article by Al Greenwood