Mexico’s ethane terminal to raise raw materials availability, benefiting wider petrochemicals – CEO
Jonathan Lopez
17-Mar-2025
COATZACOALCOS, Mexico (ICIS)–Mexico’s new ethane import terminal in the state of Veracruz is poised to transform the country’s struggling petrochemical sector by alleviating critical raw material shortages, according to the chief at the facility.
Cleantho de Paiva, CEO at the Terminal Quimica Puerto Mexico (TQPM) in Veracruz’s municipality of Coatzacoalcos, said the terminal should start up in May and be able to import 80,000 barrels of ethane, mostly from the US.
Natural gas derivative ethane has become the prime choice to produce polymers in North America after the US’s shale gas boom in the 2010s.
The ethane will be primarily delivered to polyethylene (PE) major Braskem Idesa, a joint venture between the Brazilian and Mexican chemicals producers of the same name.
TQPM is, at the same time, a joint venture between Braskem Idesa and Dutch company Advario.
ICIS visited TQPM on 15 March – a few pictures shown at the bottom.
FINALLY, START-UP PLANNED FOR
MAY
The terminal’s years-long
construction is a key project of Braskem Idesa,
which until now has been dependent on supply of
inputs mostly from Mexico’s crude oil major
Pemex, supply which at a time was unstable and
below what had been agreed.
The situation became so critical that Braskem Idesa, which operates one of Latin America’s newest PE complexes, was forced to seek alternative supply arrangements.
Industry analysts have pointed to Pemex’s supply shortfalls as a major constraint on Mexico’s petrochemical sector growth.
The terminal’s financing was at some point in doubt, although the parties agreed to inject further cash last year so it could be finalized in 2025.
TQPM will make it easier for Braskem Idesa to secure inputs necessary to produce PE, without depending on Pemex, whom at the same time would be able to redirect the inputs it was delivering to the PE producer to other petrochemicals companies.
A common theme for Mexican chemicals companies is the lack of raw materials, so any additional supply is always welcome news, said de Paiva.
“This project has a very important impact on the development of the national petrochemical industry, because it’s precisely to complement access to raw materials that we lack today. With a capacity to import up to 80,000 barrels per day of ethane, this will significantly exceed the 63,000 barrels Braskem Idesa currently requires for its operations,” said de Paiva.
“The issue of the lack of ethane in the country is structural. Since the US is the largest producer and exporter of petrochemical ethane, building this terminal gives us access to import sufficient raw material.
“When the terminal comes into operation, Pemex, which currently has an obligation to supply a certain amount to Braskem Idesa, will no longer have it and will be able to direct this raw material to its own petrochemical complexes and also resume its operating capacity,” he added.
This cascading effect could benefit Mexico’s broader petrochemical industry, potentially allowing Pemex to better serve other domestic manufacturers once relieved of its Braskem Idesa commitments.
De Paiva described this as a “structuring” event for Mexico’s manufacturing industry as it could allow the country’s petrochemical industry to return to operating its plants at higher capacities.
The executive offered a segment-by-segment assessment of Mexico’s chemical industry, noting varying conditions across different product categories.
He said polypropylene (PP) production, led by Indelpro – a joint venture between Mexico’s Alpek and the US’s LyondellBasell – as well as production of polyethylene terephthalate (PET) are performing quite well.
It is the PE market which faces significant shortages, said de Paiva.
PEMEX ASSETS
Addressing
questions about the state of Pemex’s aging
petrochemical assets, de Paiva suggested that
proper maintenance and technological upgrades
could extend the operational life of even
decades-old facilities.
Some players in Mexico’s chemicals industry think there is room for joint ventures with the private sector to revive some of Pemex’s assets. That was the opinion of Martin Toscano, director for Mexican operations at Germany’s chemicals major Evonik, in an interview with ICIS.
Other players, however, think the only way forward would be privatization so Pemex, which recurrently needs bailing out from the Mexican Treasury, would stop being a burden for the taxpayer, according to Javier Soriano, director at chemicals distributor Quimisor.
De Paiva said he could not opine about Pemex’s assets, but did say that if plants are properly maintained they should be able to run for decades after start-up.
“Petrochemical plants must operate for 30, 40, even 50 years, but they must maintain a continuous maintenance and technological upgrade program. Braskem’s experience in Brazil offers a glimpse of this: the company successfully operates plants of similar age, but with consistent investments in modernization,” said de Paiva.
Before being appointed CEO at TQPM – a position he will keep for some time after the start-up in May, he said – de Paiva spent decades working for Braskem in Brazil, his country of origin.
The terminal’s completion comes at a critical time for Mexico’s manufacturing sector, which has been looking to capitalize on nearshoring opportunities as global companies seek to reduce dependence on Asian supply chains.
Industry experts suggest that resolving raw material constraints could position Mexico’s petrochemical sector for significant growth, particularly given its proximity to the US market and competitive labor costs.
De Paiva concluded saying that once TQPM is up and running, that will create room for Braskem Idesa to think about potential expansions.
The terminal’s
storage tanks, being painted
The dock where two
Braskem Idesa-owned vessels will unload the
ethane, to come mostly from the US
Work was energetic
even on a Saturday (15 March) as TQPM’s two
partners want to inaugurate the facility in
less than two months
Miniature TQPM;
right bottom, detail of area’s map and the
pipelines (yellow line) connecting the terminal
with Braskem Idesa’s facilities, some 10km
away
Pictures source: ICIS
Interview article by Jonathan Lopez
Global News + ICIS Chemical Business (ICB)
See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.
Contact us
Partnering with ICIS unlocks a vision of a future you can trust and achieve. We leverage our unrivalled network of industry experts to deliver a comprehensive market view based on independent and reliable data, insight and analytics.
Contact us to learn how we can support you as you transact today and plan for tomorrow.
READ MORE
