Ample Room for Growth in the Petrochemical SectorWed, 01/20/2016 - 12:54
While Mexico is still working its way back to the petrochemical production capabilities that it possessed in decades past, a number of recent projects have certainly put the national industry well on its way to being internationally competitive. There are obvious examples of these types of projects, such as the construction and operation of the Etileno XXI complex by the Mexican-Brazilian joint venture Braskem Idesa. However, in order for this positioning of Mexico as a major global player in petrochemical production to be successful, projects of all sizes must also play a role in this transformation. Established in 2002 by senior experts and researchers who were all originally part of the chemicals and energy practice of the Stanford Research Institute (SRI International) in California, EnerChem Tek was originally formed to advise the Mexican government on the possibilities and models of liberalization it could contemplate for the management of what were then still exclusively PEMEX’s petrochemical assets. EnerChem Tek advised the Mexican authorities on the partnerships necessary to create what would later become the Etileno XXI project.
Mauricio Dávila, EnerChem Tek’s Managing Director, is quick to define what in the company’s view was the most important function of the Etileno XXI project. “The objective was for a private sector company or companies to commit resources and invest in an ethane cracker and downstream plants in return for a guaranteed long-term ethane supply contract at regionally competitive prices.” Although Etileno XXI experienced almost a year of delays in going online, Dávila proudly specifies that, “The ethane cracker finally started operating in the last week of March and it also started producing polyethylene resins in the first week of April of this year.”
“EnerChem Tek has three areas of expertise. We can help corporate clients in technology evaluation and selection, process economics, and market analysis in the case of companies involved in the hydrocarbons value chain. In addition, we help energy-intensive companies improve their energy efficiency levels.” Like many companies of its kind, the post-reform market has divided the company’s activities into single-client and multi-client services, although Dávila admits that the former is still much more popular. “A company might ask for a single-client service as a complement to ours in order to address a particular need that resulted after purchasing a multi-client study.”
Dávila is direct when stating that petrochemicals is not a priority area for PEMEX. Nonetheless, he is by no means pessimistic about the future of the role of this sector. “Mexico needs more investment in the downstream value chains and PEMEX is restructuring itself, creating new branches such as PEMEX Fertilizers and PEMEX Ethylene.” EnerChem Tek is looking forward to a much more diversified petrochemical market, and Dávila is eager to provide examples of the opportunities for external investors that the current Mexican petrochemical situation represents. “There are no specialty polyethylene production facilities in Mexico. The door is now open for new opportunities in specialties with much higher margins compared to commodity polyethylene, such as plastomers and elastomers, and ultra-high molecular weight polyethylene, not to mention other specialties such as EVA and ionomers, with applications in wire, cable, and medical, among others.”
EnerChem Tek is already talking to some of these prospective participants. “At the moment, EnerChem Tek is working with a US company that saw an opportunity arising from the fact that PEMEX does not have enough ethylene oxide capacity to cover the potential demand for the surfactants market. We are helping this client identify the potential consumers in Mexico, carrying out the inventory count, evaluating future PEMEX projects, and also including the general Mexican prospective supply and demand,” Dávila shares.