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Braskem partially resumes production at its unit in Mexico

January 11/2021

MOSCOW (MRC) -- Brazilian petrochemicals producer Braskem reported in a document sent to the regulator that its Mexican unit, Braskem Idesa, partially resumed polyethylene production under the terms of an "experimental business model", reported CA Posts

Braskem Idesa partially halted production last month following an interruption in natural gas supplies, after the federal government decided not to renew the ethane supply contract with the company. The outage caused the total suspension of the processes of its Ethylene XXI plant. The group said it will take legal action to defend its rights but that it cannot predict when the Mexican unit will be fully operational, given the uncertainty related to its gas supplies.

Since taking office at the end of 2018, the administration headed by Lopez Obrador has canceled or asked to review millionaire energy contracts , a policy that has generated concern among the main investment partners in the country, such as the United States, the European Union and Canada. In the case of Braskem Idesa, the national oil company Pemex accumulated millionaire penalties for failing to comply with the supply of natural gas to the Ethylene XXI petrochemical complex.

As MRC wrote before, Brazils state-run oil company Petrobras is seeking 800 million reais (USD152 million) in compensation from engineering group Odebrecht in arbitration proceedings over its alleged violation of the shareholders agreement in petrochemical company Braskem. Odebrecht is seeking to sell its 38.3% stake in Braskem SA, while Petrobras aims to offload its 36.1% stake.

We remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
Author:Margaret Volkova
Tags:Europe, PP, PE, homopolymer PP, propylene, HDPE, ethylene, petrochemistry, Braskem, Petrobras, Brazil, Canada, Russia.
Category:General News
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