Braskem Idesa SAPI began clearing land the week of Oct. 10 in Coatzacoalcos, Mexico, for Ethylene XXI — the massive project that is intended to lessen Mexico's dependence on imported polyethylene.
After land is cleared, construction will begin early next year, with production set to launch in late 2015, Cleantho Leite, Braskem Idesa commercial and business development director, said Oct. 4 at the Plastimagen México 2011 trade show in Mexico City.
When completed, the site will have more than 2 billion pounds of annual capacity for high density and low density PE and a similar amount of capacity for ethylene feedstock. Ethylene XXI is expected to create 3,000 permanent jobs as well as 8,000 construction jobs, Leite said.
Mexico currently consumes about 3.6 billion pounds of PE per year, with almost 60 percent of that amount imported from the U.S. Most material produced at the new plant is expected to be consumed within Mexico.
The complex will have two HDPE plants, using Ineos loop-slurry technology, and one LDPE plant, with Lupotech T technology supplied by LyondellBasell Industries. The technology chosen for the cracker will be supplied by Paris-based market leader Technip. The area where the complex will be built is well-served by railways, roads and seaports, Leite said.
The complex will cost $3 billion, to be spent on fixed investments, and another $1 billion to be invested in technology. Financing for the Coatzacoalcos complex is being sought from the World Bank and the Interamerican Development Bank, among others, Leite added.
The project's engineering staff includes 61 people — 29 Mexicans, 27 Brazilians and five Venezuelans. “It's a very modern project in terms of making contact with the local population,” Leite said. “We're explaining what is happening and what will happen and we have listened to their commentaries.”
And even when the plant opens, that might not be the final chapter for Ethylene XXI, according to Leite.
“Another plant will be needed if Mexico is to continue developing its PE sector,” he said, suggesting that building of such a plant should start by 2016 or 2017 at the latest.
When asked whether Braskem had any plans to build the plant or if he knew of other interested parties, Leite replied: “Our plan is to continue investing whenever there are opportunities. Any new investment would have to start in 2017.
“If Mexico has raw materials in the future to support a long-term project, many other opportunities can develop here,” he said.
Braskem Idesa is a joint venture between Brazilian plastics giant Braskem SA and Grupo Idesa SA de CV, a Mexican industrial conglomerate that operates three other petrochemical complexes. Braskem — which has bought two major U.S.-based polypropylene businesses in the last year — owns 65 percent of the Mexico City-based joint venture.
Ethylene XXI has drawn the approval of many Mexican plastics industry veterans, including Eduardo de la Tijera and Angel Oria.
De la Tijera — owner of the Grupo Texne consulting firm in Mexico City — said that Ethylene XXI “will help the situation” in Mexico's resin industry and could add 1 percent to the market's annual growth rates.
Oria — managing director of resin distributor Polímero y Materias Primas Internacionales SA de CV in Mexico City — said that Ethylene XXI “is going to change the way we do things in a positive way.”
“It's going to create more involvement in the plastics industry and more availability of material,” he said. “I think it will be like when Indelpro started making polypropylene in Mexico — that helped to increase consumption of polypropylene.”
The start of the project in itself is an event, especially after a decade of negotiating failed to launch the Phoenix Project, a much-hyped petrochemical effort that was to involve the Mexican government and several outside firms.
“The main difference [between Ethylene XXI and the Phoenix Project] is that we're offering natural gas liquids instead of [crude oil-based] naphtha feeds,” Leite said. “It's more competitive to produce the [ethylene] molecule from natural gas.”
The offer of a long-term supply contract from Mexican national oil firm Pemex also played a big role in getting Ethylene XXI off the ground.
“You're not going to put $4 billion or $5 billion in the ground with out a long-term contract to support it,” Leite said. “Then it was up to us to put together technology and investment.”