Roberto Bischoff
Director General
View from the Top

Etileno XXI Spelling out Mexico’s Petrochemical Future

Wed, 01/22/2014 - 14:14

Q: How do you envision the Mexican petrochemical sector after the Energy Reform? What will be the relationship between PEMEX and the private sector?

A: It is very important to consider that the petrochemical sector has been prominent in Mexico since the 1990s and has actually been open since then. PEMEX’s petrochemical division is allowed to have private partners. A good example of this is the partnership venture Petroquímica Mexicana de Vinilo (PMV), where PEMEX works with Mexichem. Having said that, the key change in the petrochemical sector after the Energy Reform will be the availability of feedstock for developing the industry. Once we succeed in attracting investment in the upstream segment of the Mexican oil and gas industry, we will have feedstock available and the petrochemical industry will grow based on different models. This could be through partnerships between private companies and PEMEX or based on independent private investment as is the case with Etileno XXI.

Q: Mexico currently imports the majority of its feedstock. How do you see this situation evolving over the next five to ten years?

A: Mexico is a net importer of natural gas and is suffering from some restrictions due to poor availability. PEMEX’s short-term strategy seems to rely on importing natural gas from the US. Based on that, I do not foresee Mexico becoming a net exporter of natural gas in the near future.

Q: To what extent will the expansion of the Port of Coatzacoalcos be essential for Etileno XXI to meet its production targets?

A: The Port of Coatzacoalcos has been essential for Etileno XXI from the start, as most of the equipment which has been produced for us in different parts of the world has entered Mexico through the port. The proximity of the port during the construction stage of the project was one of the greatest advantages Etileno XXI has enjoyed. In the future, we will be exporting about 30% to 40% of our production. Our project is expected to reach 100% production capacity in five years, which will then be directed to the domestic market. But in the beginning we will have to export, which will be done through the port of Veracruz as it is well adapted to moving containers, has a good international presence, and sees a far greater movement of ships. We also have the alternative of using the Pacific coast to connect with Asia should we need to. Although Coatzacoalcos will continue to play an important role for Braskem-Idesa during the construction stage, after that, Veracruz will become a more important player.

Q: How would you describe the process of cooperation and synergy between the players involved in the development of Etileno XXI?

A: ICA Fluor, Technip, and Odebrecht are partners in a contract and formed a joint venture that is responsible for the construction of Etileno XXI. In the end, our aim is to have a multi-skilled and multicultural team to manage the project, but that represents a challenge as it is not easy to bring Brazilians, Italians, Mexicans, and twenty other nationalities together with one common objective, namely to complete the project on time and on budget. That is the greatest challenge, but after working on this for the past year, we are doing much better and we are working very close together to do our best for the project.

Q: What aspects of this collaboration could still be improved?

A: It is difficult for various companies to adapt to the same mindset and culture. These elements cannot be completely changed in just over one year. When bringing together different people from different companies, we must consider their respective cultural aspects and how challenging these can be to the whole relationship. It takes time to build the right amount of trust for everyone to successfully be on the same page.

Q: What is your perspective on the future development of the Mexican downstream sector and what could be the role of Braskem-Idesa in this development?

A: I hope that the Mexican reforms can develop the right conditions to allow not only Braskem-Idesa but also other Mexican petrochemical companies to invest in the country’s wide variety of opportunities. Mexico is a net importer of most petrochemical products and is very competitive within the manufacturing industry. There will be opportunities for the private sector, PEMEX, and all players to keep investing in Mexico.