Mexichem SAB de CV withdraws from planned US$1 bln ethylene cracker on Mexico’s Gulf coast

12-Nov-09

Pemex Gas y Petroquímica Básica, a subsidiary of state oil company Petroleos Mexicanos, had recently announced inking a MOU for a planned US$1 bln ethylene cracker on Mexico’s Gulf Coast. PVC and specialty chemicals maker Mexichem SAB de CV has withdrawn from the consortium, citing unsuitable conditions as the reason for withdrawal. The original consortium included, apart from Braskem and Idesa, Mexichem and Alpek SA de CV, a subsidiary of Mexico’s publicly owned Alfa Group. The tentative agreement calls for Pemex to supply Braskem and Idesa with 66,000 bpd of ethane for the cracker, which will be built in Coatzacoalcos, Veracruz state, by about 2015. The project was proposed during the regime of President Vicente Fox to supply annually, 2.64 billion lbs of ethylene and 1.32 billion lbs of propylene from 2009 onwards. The project was canceled after several years' planning when Pemex and its private sector partners, including Idesa, Nova Chemicals Corp. of Pittsburgh, and Indelpro SA de CV of Monterrey, failed to agree on feedstock prices.