What some experts call the largest petrochemical investment project in North America in the past decade might never have gotten off the ground without the commitment of the presidents of Mexico and Brazil.
“In order to finance this important project, [confirming] the strategic interest of the governments of Brazil and Mexico was necessary,” said an Aug. 23 news release from Mexico's government-owned foreign trade bank, Bancomext. That commitment was achieved several months ago when Presidents Felipe Calderón of Mexico and Luz Inacio Lula Da Silva of Brazil met in Cancún, Mexico, Bancomext said.
It added that Ethylene XXI is a “very relevant strategic association” between Mexico and Brazil.
Banks in Mexico and Brazil have agreed to a strategy for financing the $3 billion Ethylene XXI complex, to be built on Mexico's Gulf Coast by 2015. Bancomext and BNDES, Brazil's national economic and social development bank, will be among the principal contributors of funds.
Others will include Mexico's government-run development bank, Nacional Financiera, plus export credit agencies from countries outside Mexico and private credit institutions. All funding arrangements must be completed by mid 2011, according to the agreement.
The heads of Bancomext and BNDES — Héctor Rangel Domene and Luciano Couthino, respectively — decided on the the financing strategy at a meeting in Rio de Janeiro, according to Bancomext.
The challenge facing Rangel and Couthino is “to attract diverse resources that will enable the financing of the project to proceed in a competitive manner,” Bancomext added.
Brazilian petrochemicals giant Braskem SA of São Paulo and Grupo Idesa SA de CV in Mexico City formalized an agreement in March to build the complex in Coatzacoalcos. It will include an ethylene cracker and three polymerization plants. Pemex Gas y Petroquímica Basica, an affiliate of Mexican oil monopoly Petróleos Mexicanos, will supply the feedstock for the cracker — 66,000 barrels of ethane per day over 20 years.
The banks put the project's cost at about $3 billion.
Bancomext stands for Banco Nacional de Comercio Exterior SNC, and BNDES for Banco Nacional de Desenvolvimento Econômico e Social.
Mexico, which imports more than 3 billion pounds of polyethylene a year, will become self-sufficient in PE once the complex is operating, Bancomext said. The facility will employ 3,000, including part-time staff.