MEXICO CITY (Aug. 20, 9:25 a.m. ET) — Increased shale gas development is leading Mexican plastics and chemicals firm Mexichem SAB de CV to form a joint venture to make ethylene feedstock with Occidental Chemical Corp., a plastics and chemicals firm based in Dallas.
The proposed JV would build a cracker using natural gas-based ethane at an undetermined site. The cracker would have more than one billion pounds of annual ethylene capacity, which OxyChem would then use to make PVC feedstock vinyl chloride monomer at its complex in Ingleside, Texas.
The resulting VCM would be shipped to Mexichem plants in Mexico, where it would be used to make PVC. A feasibility study for the proposed cracker is to be completed in the second quarter of 2013. If the plan can be economically justified, the cracker would begin operations in 2016.
“Through this agreement, as well as its joint investment with Pemex, Mexichem expects to assure its supply of VCM required to operate its PVC plants,” Mexichem officials said in the release.