Braskem, the Brazilian petrochemical producer, announced this Tuesday it signed a new deal with Petroleos Mexicanos (Pemex) for the delivery of ethane, and the construction of a new terminal. The deal settles a long-running conflict between the two companies and opens a new chapter for them.
Firstly, the Mexican subsidiary of Braskem, Braskem Idesa, was the company that signed the agreement with Pemex. According to Reuters, citing a securities filing, the construction of the new ethane terminal would fulfill Idesa’s needs for the raw materials. In addition, Pemex, Pemex Logistica, and another Mexican government entity will support the construction of the new terminal.
Secondly, Braskem would invest around $400 million for the new terminal. It will be located in Laguna de Pajaritos, in Coatzacoalcos, Veracruz. In addition, the plant would enter commercial operations by the second half of 2024; or by February of 2025, at the latest.
Moreover, the terminal deal also includes a supply agreement. Under it, Idesa will supply Pemex with 30,000 barrels of ethane per day until the new import terminal becomes operational. As outlined above, the deal settles a long-running conflict between the two companies.
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Braskem and Pemex deal to strengthen energy sector in Mexico
In fact, last year, Pemex weighed to cancel its ethane supply contracts with Braskem due to its high costs. Nevertheless, back in March, Pemex announced an agreement with Braskem for the delivery of 30,000 barrels of ethane per day until 2024. However, its first contract was for 66,000 barrels per day for 20 years.
Furthermore, the new contract also gives Braskem Idesa a preemptive right to acquire all of the ethane available for Pemex. Ethane that the Mexican company would not use until 2045 at prices in line with international markets.
According to Pemex, the new deal would “allow long term sustainability to our plant in Nanchital de Lazaro Cardenas del Rio, in Veracruz.” The company also noted. “the project would consolidate the CIIT Interoceanic Corridor in the Tehuantepec Isthmus. It is, in fact, one of the investment initiatives that the federal government had announced for the energy sector in Mexico.”
Finally, Pemex noted. “The new deal guarantees the operations of Braskem Idesa. It offers certainty to its clients, stockholders, and collaborators. At the same time, it promotes development for the firm, which is a source for raw materials essential for numerous productive enterprises.”
