APLA ’18: Braskem Idesa explores US ethane imports for Ethylene XXI – CEO

CANCUN, Mexico (ICIS)–Braskem Idesa is exploring US ethane imports for its Ethylene XXI petrochemicals complex in Coatzacoalcos, Mexico, its CEO said on Monday.

“We are analysing [an ethane import terminal]. We are just waiting for the new government, to see if there is an opportunity to work together to do something for natural gas and ethane,” said Stefan Lepecki, CEO of Braskem Idesa.

Lepecki spoke to delegates at this year’s annual meeting of the Latin American Petrochemical Association (APLA).

“Mexico is going through a complicated process, and the vision of the new government to strengthen Pemex is important. But it will not be easy and a short term task. During that time, it is fundamental to have imports of natural gas and ethane to complement production,” he added.

Government-owned Pemex is the sole supplier of ethane in Mexico, and much of it goes to Braskem Idesa’s 1.05m tonne/year ethylene and polyethylene (PE) complex.

However, the ethane from Pemex is still not enough, fulfilling about 80-85% of Braskem Idesa’s needs, Idesa CEO Jose Luis Uriegas told ICIS earlier in the meeting.

Mexico needs more petrochemical feedstocks for its industry to be competitive, said Lepecki.

The new government has committed to greater investment in Pemex to boost production and modernise assets. This and the energy reforms allowing for private sector investment in the energy and petrochemical sectors are positive factors, but will take time to yield results, he noted.

As ethane becomes more tradable worldwide, “this will bring a new dynamic to the PE market where global differences will not be that wide”, said Lepecki.

The CEO is positive on the overall outlook for PE even amid the US capacity wave and US-China tariff battle as global demand growth continues to be healthy.

“The tariff war between the US and China are putting global PE trade flows in transition. But with increasing global demand, I am confident these flows will be accommodated,” said Lepecki.

He also expressed optimism that the US and China would eventually come to a trade agreement, and that PE trade flows from the US to China will go back to previous levels.

The APLA annual meeting runs through Tuesday.

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