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MOSCOW (MRC) -- Braskem Idesa says it
is reopening its Etileno XXI ethylene-polyethylene (PE) petrochemical
complex at Coatzacoalcos, Mexico, after signing agreements with Mexico’s
state-owned companies Petroleos Mexicanos (Pemex) and National Natural Gas
Control Center (Cenagas), reported Chemweek.
The complex was forced to shut down in
December 2020 after Cenagas halted gas supplies to the plant. This followed
unsuccessful talks between Braskem Idesa and Pemex over the renegotiation of an
existing supply contract for feedstock ethane.
Braskem Idesa says it has
now signed documents with both Pemex and Cenagas that will enable the facility’s
“continued operation.” An agreement with Cenagas covers natural gas transport
services for a term of 15 years. This is, however, conditional upon the outcome
of further discussions between Braskem Idesa and Pemex over “potential
amendments to the ethane supply contract and for the development of an ethane
import terminal,” it says.
A memorandum of understanding (MOU) signed by
Braskem Idesa and Pemex has set out “respective understandings” for the ethane
supply discussion, as well as a forward process to enter into definitive
documentation, approval by Braskem Idesa’s shareholders and creditors, and with
reservations of rights, it says.
With the signing of these agreements,
Braskem Idesa “immediately commenced to receive the service of natural gas
transportation, which had been unilaterally terminated,” it says. The existing
ethane supply contract between the two companies “has not been modified and
remains in full force and effect,” it adds, noting that it “cannot predict the
outcome of such discussions with Pemex, its shareholders, and creditors.”
Braskem Idesa announced in December it was taking steps to shut the
Etileno XXI petrochemical complex after Cenagas halted gas supplies. Cenagas had
said at the end of November it would not renew a contract for supply of natural
gas and blocked supplies the following day, according to Braskem Idesa in a
statement at the time. There were indications that the decision was driven by
Mexican President Andres Manuel Lopez Obrador, who had announced that Pemex
would no longer supply natural gas to Braskem Idesa as the contract terms were
deemed to be unfair, according to Adrian Calcaneo, senior consultant with IHS
Markit, at the time of the petchem plant’s announced shutdown.
Pemex has
struggled to meet ethane supply commitments to the plant, the largest petchems
investment in Latin America, as Mexico’s oil and gas production has declined
significantly in recent years. Earlier in 2020, Braskem Idesa began importing
ethane from the US to the plant. The company has spent $4 million on logistics
infrastructure to be able to import up to 12,800 barrels/day of ethane, 19% of
the volume required by the facility.
The Etileno XXI complex, which
comprises a 1.05-million metric tons/year ethylene plant and three polyethylene
(PE) units, had a utilization rate of 84% in the third quarter of 2020,
according to a Braskem presentation later in the year. The main grades of PE
produced are high-density polyethylene (HDPE) for blow molding and film, and
low-density polyethylene (LDPE) for film.
As MRC informed earlier,
in June 2020, Braskem announced the selection of Charleston, South Carolina for
its new global export hub facility to serve international customers. The hub
will provide packaging, warehousing and export shipping services to support
Braskem's polypropylene (PP) production facilities in the United States. With
the design and development phase well underway, the new global export
hub was expected to be completed by the third quarter of 2020 and will have
a capacity to support export shipments of up to 204,000 metric tons/year of PP
and specialty polymers.
Ethylene and propylene are feedstocks for
producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report,
Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2%
year on year. Only shipments of low density polyethylene (LDPE) and high density
polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to
the Russian market reached 1 240,000 tonnes in 2020 (calculated using the
formula: production, minus exports, plus imports, excluding producers'
inventories as of 1 January, 2020). Supply of exclusively PP random copolymer
increased.
Braskem S.A. produces petrochemicals and generates
electricity. The Company produces ethylene, propylene, benzene, toluene,
xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam,
ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and
polyvinyl chloride (PVC). |
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