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Braskem Idesa announced partner for new $400 MM Mexico ethane terminal

Braskem Idesa´s new partner in a $400 MM investment in an ethane import terminal in Mexico will be Advario, part of the storage and logistic infrastructure company Oiltanking, Braskem said on June 14.

Construction is scheduled to begin in July and end in 2024. The venture is majority owned by Sao Paulo-based Braskem with Mexico´s Idesa group as minority partner. Braskem and Idesa have been partners since winning in a consortium a tender for a long-term contract to buy ethane from Mexico´s Pemex about 12 years ago.

The Puerto Mexico Chemical Terminal, as the ethane import terminal project will be called, will create 2,000 jobs during construction, the company has said.  

The site will be connected to Braskem Idesa´s polymer complex through an 11-kilometer pipeline. Braskem Idesa built the Nanchital complex to produce ethylene based on the contract to purchase the ethane feedstock that it had won in public bidding.

Braskem Idesa´s ethylene and polyethylene complex in Nanchital has capacity to produce 1.1 MMtpy of polyethylene. It needs imported ethane because Mexican ethane production declined over the past decade and Pemex cannot supply enough feedstock to run the plant at capacity. The Nanchital plant has not run at capacity since completion in 2016.

A new jetty will also be built with an exclusive area for operations with cryogenic ethane, the company said. Advario's portfolio comprises world-scale storage terminals located strategically in key hubs across the globe, Braskem Idesa said.

Braskem had said in its first quarter earnings call that it planned to make an announcement of a partner by June. The Braskem investment is the biggest current foreign private investment in Mexico.

Braskem started to import ethane from the U.S. around the first quarter of 2020 but it is limited in the volumes that it can import due to logistics constraints that will be solved with the new terminal.

Ethane, fractioned from natural gas, is the raw material for the ethylene that is polymerized into the polyethylene material most commonly seen as plastic supermarket bags or milk jugs.

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