MOSCOW (MRC) -- Brazilian petrochemical producer Braskem has lifted the investment forecast for its flagship Etileno XXI complex in Mexico by 13% amid rising construction costs, the company said on Friday, reported BNAmericas.
The overall outlay for the project in the Coatzacoalcos region of Veracruz state has been revised to USD5.2bn, according to a Braskem securities filing.
The Sao Paulo-based firm said it had assumed additional expenses related to infrastructure and local services, and a change to the power generating unit capacity. The company aims to sell surplus electricity from the unit to Mexico's grid.
Braskem also said "the amount corresponding to its portion of the additional contribution, close to USD450mn, required for the project completion, will not result in an increase of its annual level of investments."
The centerpiece of Braskem's project pipeline, Etileno XXI is a joint venture with Mexican industrial conglomerate Idesa, which owns a 25% stake.
The ethane cracker, expected to begin operating by December, will have annual polyethylene (PE) capacity of 1.05Mt.
As MRC wrote before, in 2012, Braskem Idesa announced the approval of a line of credit in the amount of USD700 million by the Brazlian National Economic and Social Development Bank - BNDES to finance the construction of the largest petrochemical complex being developed in the Americas: Braskem Idesa- Etileno XXI Project. The group of financial institutions will also include Mexico's development banks, Bancomext and Nafinsa- Nacional Financiera, and commercial whose loans are subject to the completion and closing of the formal documentation.
Braskem is Brazilian main producer of polyethylene and polypropylene. In addition with ongoing plants located in both petrochemical complexes, in April 2008 Braskem opened a 300,000 metric ton polypropylene plant in the city of Paulinia (Sao Paulo).
MRC