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Braskem Idesa will have half of the ethane supply from Pemex

Pemex would halve its contracted supplies of ethane to Braskem Idesa to 30,000 barrels per day (b/d), both companies reported Tuesday.

Braskem Idesa, a subsidiary of Braskem Netherlands BV, agreed to modify the ethane supply contract with Pemex Transformación Industrial and Pemex Exploración y Producción (Pemex) with settlement of previously existing pending contractual issues.

Before, the 2010 contract establishes that Pemex provide Braskem Idesa with 66,000 b/d of ethane for 20 years.

Now the new agreement establishes the support measures for the construction project of an ethane import terminal with the capacity to meet all the raw material requirements of that private company.

Thus, the amendment changes the minimum volume commitment to 30,000 barrels per day until the earliest of: the commissioning of the ethane import terminal, scheduled for the second half of 2024, or February 2025 (which could be extended if there would be delays in obtaining licenses).

The amendment also grants this private company the preferential right to acquire all the ethane that Pemex has available and has not consumed in its own production process until 2045, at international reference prices.

Braskem Idesa

The terminal project is designed to complement the supply of ethane in Mexico and allows the company to operate at full capacity by accessing new sources of raw material.

To become effective, the Amendment and the Termination Agreement are subject to the corresponding corporate approvals, including the final approval of Braskem Idesa’s shareholders and creditors.

In addition, investments in the terminal are subject to final approvals by the governing bodies of this competent private company and its shareholders.

At the moment, the outcome of the discussions with its shareholders and creditors cannot be predicted. The company will keep the market informed of relevant developments, in accordance with applicable laws.

Braskem Idesa, a joint venture between Brazil’s Braskem and Mexico’s Idesa, has a production capacity of 1.05 million mt/year of ethylene and polyethylene.

 

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