Braskem says expansion in Mexico possible, but 'not for the moment'

Mexico City — Two weeks after celebrating the third year of production at its Ethylene XXI petrochemical complex in Nanchital, Veracruz state, Braskem Idesa SAPI is mulling the possibility of expansion.

"We are always looking at that," the Brazilian-Mexican joint venture's commercial director, Alfredo Prince, said at Plastimagen. "We have the space."

However, Mexico's ethane feedstock shortfall means that expanding the $5.2 billion facility, whose ethane cracker has a production capacity of 1.05 million metric tons of ethylene a year, will have to wait. Prince said the cracker is running at just above 80 percent of its capacity.

"Expansion? Not for the moment," Cleantho de Paiva Leite Filho, Braskem Idesa's director of institutional relations, told Plastics News in a separate interview April 2.

"We can't talk of expansion right now. What we can talk about is how to improve the availability of additional raw materials so that both Braskem Idesa and Pemex Etileno can operate at full capacity.

"Unfortunately Pemex Exploración is not producing enough gas to supply the country's [three crackers]," he said.

Petróleos Mexicanos (Pemex) is under contract to supply Braskem Idesa with 66,000 barrels of ethane a day for 20 years. But it has a deficit of 30,000-35,000 barrels a day, Leite said in February.

"This is the main problem which we should all work together to overcome," he added at Plastimagen.

"In the short term, we should all get together and build a new infrastructure, a new input terminal," which would allow Ethylene XXI and the nearby Pemex crackers at Cangrejera and Morelos to operate at full capacity. "When this terminal is built, then we can start thinking of expansion. Right now it's premature, [to talk about it]," he said.

Asked how far away an input terminal is from getting built, Leite said: "Not so far away because the energy authorities [in Mexico] have understood that this is a must for this country and will bring in lots of benefits. Hopefully this decision can be made this year."

He said "plenty of people are willing to invest." It was a matter of Pemex, which owns most of the land and rights of way in the Coatzacoalcos area of Veracruz, to make the land available for private investment in a new input terminal.

According to Prince, Braskem Idesa has 1,500 clients, most of whom are in Mexico.

It also has clients in Central America, the Caribbean, the United States, Europe and South America, he said.