Braskem Idesa imports ethane from the US to complete Pemex supply

Braskem Idesa (BI) imported approximately 35,000 tons of ethane from the United States in the fourth quarter of 2020, to complement the ethane supplied by Pemex.

As an annual average per day, the volume equals 7,000 barrels.

It also represented 9% of the polyethylene utilization rate of the Petrochemical Complex in Mexico, whose utilization rate stood at 48% in the quarter.

In December 2020, Braskem Idesa (a Braskem subsidiary) completed an expansion of the Fast Track operation, which currently has an expected capacity of 20,000 barrels per day of ethane, or about 30% of the total ethane requirement of the petrochemical complex.

Above all, Braskem’s recurring operating income in Mexico was 63 million dollars in the fourth quarter of 2020, this is 18% lower compared to the same period of the previous year.

In the last quarter of 2020, Braskem Idesa was notified by the National Center for Natural Gas Control (Cenagas), the Mexican government agency responsible for the gas pipeline and natural gas transportation system, about the unilateral suspension of natural gas transportation, Fundamental energy input for the production of polyethylene in the Petrochemical Complex of Mexico.

Consequently, and respecting security protocols, BI immediately suspended its operations.

Braskem Idesa

Then, on January 7, 2021, the partial resumption of polyethylene production by BI was announced based on an experimental business model that follows all safety protocols and reduces the impacts on meeting the demand of the industry of the plastic in Mexico.

According to the Notice to the Market of March 1, 2021, Braskem Idesa signed with Pemex and Cenagas the following documents to allow the continuity of the BI operation:

A memorandum of understanding with Pemex establishing the respective understandings for the discussion of possible amendments to the Ethane Supply Contract and for the development of an ethane import terminal, subject to negotiation, signature of definitive documentation, approvals from BI shareholders and creditors and with reservations of rights.

A natural gas transportation service contract with CENAGAS, with a term of 15 years, said term conditional on the signing of the definitive documentation referred to in the previous paragraph.

With the signing of these documents, Braskem Idesa began to receive the natural gas transportation service, which had been unilaterally canceled in December 2020, allowing the Company to use natural gas in its electricity production and generation process.

Furthermore, the Ethane Supply Contact existing between BI and Pemex has not been modified.

Braskem posted revenue of $ 11.381 billion in 2020, a decrease of 14% year-on-year.

At the same time, Braskem reported an annual net loss of 1,367 million dollars, more than double (106%) compared to its negative balance in 2019.