Braskem Idesa to start construction of Mexico ethane terminal in Q3

HOUSTON (ICIS)–Braskem Idesa plans to start construction of a Mexican ethane terminal in the third quarter, with completion expected in the second half of 2024, Brazilian partner of the joint venture said late on Wednesday.

The terminal will be able to import 80,000 bbl/day, and its start-up will allow Braskem Idesa to rely on exports for all of the feedstock it needs to run its ethane cracker, Braskem said.

In fact, the terminal will provide Braskem Idesa with 120% of the ethane needed for its operations. As such, it should allow the joint venture to expand PE production by about 15%, Braskem said.

Fixed costs related to the terminal will run $150-200/tonne, with the costs falling as the level of imports rise, the company said.

The terminal should cost $400m, Braskem said.

The Netherlands-based engineering services provider Advario will hold a 50% stake in the terminal.

The terminal will serve Ethylene XXI, Braskem Idesa’s integrated polyethylene (PE) complex in Coatzacoalcos, Mexico.

The Braskem Idesa cracker in Coatzacoalcos has 1.05m tonnes/year of ethylene capacity and downstream capacities of 750,000 tonnes/year of high density PE (HDPE) and 300,000 tonnes/year of low density PE (LDPE).

Braskem Idesa is a joint venture made up of Braskem (75%) and Mexican chemical producer Grupo Idesa (25%).

Braskem Idesa had built Ethylene XXI with the expectations that it would receive all of its feedstock domestically.

However, a chronic decline in oil production has caused Mexico’s surplus of ethane to turn into a deficit.

As a result, Pemex failed to supply Braskem Idesa with enough ethane under the terms of its contract.

Braskem Idesa offset a portion of the shortfall by importing ethane from the US and relying on trucks to deliver the feedstock from a Mexican port to the complex.

Braskem Idesa and Pemex had since amended the ethane supply contract. Under the new terms, Pemex agreed to supply Braskem Idesa with a minimum of 30,000 bbl/day of ethane.

During the fourth and first quarters, Pemex had exceeded its contract volumes, Braskem said.

But during the second quarter, Pemex failed to fulfil its obligations and supplied Braskem Idesa with only 22,100 bbl/day.

The shortfall was most pronounced in April and May, and Braskem attributed it to problems Pemex had with natural-gas processing.

There was some recovery in June, and Braskem expects Pemex will return ethane shipments to their contract levels.

Additional reporting by Jonathan Lopez

Thumbnail shows PE, which can be made with ethane. Image by Al Greenwood.