Braskem eyes Mexican expansion as ethane terminal project nears completion

The construction of a US$580mn ethane import terminal in the Mexican port of Coatzacoalcos will allow Brazilian petrochemicals company Braskem to expand its operations in the country, company officials said at an investor day on Monday.

The terminal in Veracruz state is set to start supplying Braskem's polyethylene plant with ethane feedstock in the first quarter of 2025. 

“The terminal will have the capacity to supply up to 80,000 barrels per day,” Stefan Lepecki, CEO of Braskem Idesa, told the call. 

"Our complex today needs 64,000 barrels per day to operate at 100% capacity, which represents the possibility to carry out a future expansion of our complex.”

Feedstock shortfalls

Braskem began producing polyethylene in Mexico in 2016 via its Braskem Idesa joint venture with Mexico’s Grupo Idesa.

Output at the company’s US$5.2bn plastics plant in Coatzacoalcos has been hampered by shortfalls in ethane supply from Pemex, Mexico’s debt-burdened national oil company.

Ethane is used to produce polyethylene.

The new terminal will allow Braskem Idesa to replace feedstock from Pemex with more reliable ethane supply from the US.

The plant in Coatzacoalcos, which exports polyethylene to more than 40 countries, has operated at below 80% of capacity in recent years because of the problems at Pemex.

Rosana Avolio, Braskem’s director of investor relations, said Monday that completion of the ethane import terminal “will make expansion in Mexico viable.”

“The Mexican market has been growing in a stable and consistent manner,” Lepecki added. “Our outlook is for continuity of this growth.”

The ethane terminal is a joint venture between Braskem Idesa and Dutch storage specialists Advario.

In September, the project in Veracruz state, known as Terminal Química Puerto México, was 87% complete. Construction began in 2022. 

Rio de Janeiro plans

Braskem is also eyeing expansion in its domestic market. It may increase the capacity of its plant in Rio de Janeiro if new regulations in Brazil increase the availability of natural gas feedstock for the petrochemicals industry, company officials told the call on Monday.