The National Center for Natural Gas Control (CENAGAS) informed Braskem Idesa on November 30 that it would not renew the Firm-Based Transportation Services Contract for the transportation of natural gas.
“It also blocked the entry of gas the following day, in detachment from the interruptible base contract with the contract in force and without taking into account Braskem Idesa’s request to maintain 48 hours of reduced supply to safely stop its operations. for people, neighbors and the environment,” said the petrochemical company in a statement.
Since 2015, CENAGAS has managed and administered the natural gas transportation (by pipeline) and storage system.
CENAGAS also provides transportation services, for which in 2015 Pemex transferred the pipeline infrastructure to it.
Mexico has an estimated 17 trillion cubic feet (Tcf) of proven natural gas reserves. Natural gas is increasingly replacing oil as a raw material in power generation.
However, higher levels of natural gas consumption will likely depend on more pipeline imports from the United States or liquefied natural gas (LNG) imports from other countries.
“The actions of CENAGAS have caused the total suspension of the plant’s processes, with the consequent and negative repercussions not only for us, the plant, our customers, suppliers and employees, but also for the hundreds of businesses that depend on the chain of value, affecting the national petrochemical industry and the economy as a whole ”, added Braskem Idesa.
Founded in 2010, Braskem Idesa is a Mexican company formed by the association of Braskem (Brazil), the largest petrochemical company that produces thermoplastics on the continent, and one of the leaders in Mexican Petrochemicals, Grupo Idesa.
Together they developed a petrochemical complex for the production of high and low density ethylene and polyethylene in the municipality of Nanchital, Veracruz, in Mexico, which produces 1,050,000 tons per year of ethylene and polyethylene, which came into operation in 2016 .
“The decision violates our rights including multiple legal provisions in force. Braskem Idesa has indicated that its conduct has always been in accordance with the law and the legal framework of our country and that its daily conduct has been in accordance with the most demanding international standards and practices.
“We have repeatedly expressed our willingness to discuss with the authorities the issues that are being raised today in relation to the operation of Braskem Idesa and its contracts with Mexican state companies, bringing proposals for solutions,” argued the company.
As a result of the reform, three new institutions were created that have been operating since 2015: CENAGAS, CENACE and ASEA.
CENAGAS and CENACE are decentralized public bodies of the Ministry of Energy.
CENAGAS manages and administers, independently, the pipeline transportation and storage system for natural gas, to guarantee supply.
In turn, CENACE controls the operation of the national electricity system, operates the wholesale electricity market and guarantees non-discriminatory access to the transmission and distribution networks.
Finally, ASEA is a decentralized body of the Ministry of Environment and Natural Resources (SEMARNAT) that regulates and supervises the operational safety of facilities, industrial safety in companies, the dismantling and abandonment of facilities and waste control. and polluting emissions.
“We ask that the rule of law and respect for the law, commitments expressed by this administration, guide this controversy and allow rectification of the decisions made by CENAGAS, which is a challenge to, among other things, the safety of operations.
“We inform the national and international financial community, our clients, suppliers, employees and collaborators, that Braskem Idesa, in compliance with its fiduciary and corporate responsibilities, must take the actions that exist within the framework of the law to defend their right and heritage,” said the company.