Mexico City — Brazilian-Mexican joint venture Braskem Idesa S.A.P.I. will invest $400 million in a cryogenic ethane gas import terminal it plans to construct in Coatzacoalcos on Mexico's Gulf coast, the company confirmed Oct. 1.
To be built over three years, the terminal will be able to supply Braskem Idesa's $5.2 billion Ethylene XXI petrochemicals complex in nearby Nanchital with the 66,000 barrels a day of ethane needed to run the complex at full capacity, the company said.
The terminal's storage capacity will be 100,000 cubic meters of cryogenic ethane, BI added.
Since Ethylene XXI opened in 2016, state-run oil company Petróleos Mexicanos has struggled to meet its commitment to supply Braskem Idesa with the facility's ethane requirements.
Mexico "has a deficit of 30,000-35,000 barrels per day of ethane," Cleantho de Paiva Leite Filho, Braskem Idesa's director of business development, institutional relations and energy, told Plastics News in February 2019.
The problem came to a head in December 2020 when Mexico President Andrés Manuel López Obrador took exception to the fines Pemex was being handed for noncompliance with two ethane supply contracts it signed with Braskem Idesa in 2010.
At about the same time, another state-owned company, Centro Nacional de Control de Gas Natural (Cenagas), unilaterally suspended natural gas supplies to Ethylene XXI, forcing BI to shut down the complex.
However, in early March both parties announced they had signed a memorandum of understanding aimed at modifying the ethane supply contracts.
Pemex CEO Octavio Romero Oropeza said the modifications included in the MOU would save Mexico about 13.75 billion pesos ($661 million).
Pemex, he said, would be required to supply only 30,000 barrels a day of ethane gas to Braskem Idesa and only until 2024, not 2030 as agreed in the original contracts.
"Subject to final approval by the boards of directors of both parties, as well as BI's creditors, the agreement resolves long-standing differences that had been under discussion by the parties and establishes new volume and price commitments for the supply of ethane from Pemex to BI, in line with the current and future availability of this feedstock in Mexico," BI said in a statement.
BI said the new terminal will be part of the federal government's plan to develop the southeast of Mexico and the country's energy sector.
The Ethylene XXI complex incorporates a 1.05 million metric-tons-per-year ethane cracker. It also has the installed capacity to produce up to 750,000 metric tons a year of high density PE and 300,000 metric tons a year of low density PE.