Pemex ethane shortage hits Braskem petchem plant in Mexico

Brazilian petrochemicals giant Braskem is blaming Mexico’s national oil company Pemex for lower utilization rates at its plastics plant in Veracruz.

Braskem is the largest plastics producer in the Americas and the largest producer of polyethylene in Mexico. Its 1.05Mt/y Braskem Idesa polyethylene plant in Mexico uses ethane provided by Pemex as feedstock.

In a production and sales report released on Thursday, Braskem said that average utilization of the plant in Q2 was 78%, 5 percentage points (pp) lower than in Q1 and 8pp lower than a year ago.

Braskem said the decline was due mainly to lower availability of ethane from Pemex, which provided the plant with 26,000b/d of the feedstock, compared to 30,000b/d in the first quarter and 36,000b/d in 2Q23. 

Braskem increased its volumes of imported ethane in the same period. The company is currently constructing a US$400 million ethane import terminal in Coatzacoalcos, Veracruz, in order to ensure more reliable ethane supply.

Construction is due to be completed by the end of 2024. The ethane import terminal and pipeline will have capacity of 80,000b/d of ethane and end Braskem's reliance on Pemex.

Ethane shortages in Mexico are mainly the consequence of the country's falling hydrocarbons production and the deterioration of Pemex’s refineries.

Braskem's results in Mexico were also affected by scheduled maintenance at the plastics plant in April.

Source: Braskem