Port of Coatzacoalcos Expansion

Wed, 01/21/2015 - 14:04

As a hub for the petrochemicals industry, the state of Veracruz is a keystone in the country’s economic activity. In fact, 85% of all petrochemical products made in the country come from this state. Veracruz’s industrial sector stands ready to receive ever more domestic and foreign capital, highlighting the importance of investing in the expansion and improvement of necessary infrastructure. The Port of Coatzacoalcos is a good example of this as it is the largest port on the Mexican side of the Gulf of Mexico, the third largest in the country, and the most important national port in terms of bulk cargo. Guillermo Ruiz de Teresa, General Coordinator of Ports and Marine Commerce at the Ministry of Communications and Transport, states that investing in ports on the Gulf is crucial as this is where the first effects of the Energy Reform will be felt. Now that the private sector is allowed to participate in the basic petrochemicals industry, a significant increase in the production of natural gas, methane, and naphtha for secondary petrochemicals is expected around Coatzacoalcos, which should be followed closely by new investments. The ball is already rolling, as proven with Etileno XXI, the biggest petrochemical complex in Latin America, which consists of an ethanol cracker and three polyethylene plants. With a total investment of US$4.4 billion, this complex represents the largest private investment in Mexico in the past decade.

As part of the modernizing efforts included in the National Development Plan, and in order to address the country’s growing commercial and industrial activities, the Port of Coatzacoalcos has been undergoing a massive infrastructure expansion. Some of the works include the improvement of an open space storage yard, the expansion of a parking lot with the capacity to host 130 trailers, the paving of 43,000m2 to expand the port onto the Laguna de Pajaritos, and the construction of a floating dock for the revision of minor ships. The port will invest close to MX$330 million in expanding its docks, with the longest one being expanded from 270m to 665m, which will allow the arrival of ships with far larger drafts. The trailer yard alone received an investment of MX$6.5 million.

The construction of Etileno XXI was partly possible due to the expansion of the Port of Coatzacoalcos. In 2013, over 10,000 tonnes of machinery arrived through this port, including reactors, tanks, towers, and other oversized equipment intended for the most important petrochemical developments in the region. The development of Etileno XXI has demonstrated API Coatzacoalcos’ operative efficiency, as well as its ability to handle incredibly large cargo. Roberto Bischoff, Director General of Braskem Idesa, and the owner of Etileno XXI, says that the next step is to improve roads and railroads around Coatzacoalcos. Many of Etileno XXI’s raw materials arrive either through the port or by pipeline, but plenty of finished products will need to be moved out. Braskem Idesa foresees 50-60% of these goods being transported using railroads and the rest moving by truck. However, for this to happen, infrastructure expansion at the port is not enough. These projects are part of the Trans-Isthmic Corridor that will connect Coatzacoalcos with Salina Cruz in Oaxaca. This route greatly reduces the time and cost of shipping goods from the Atlantic to the Pacific and viceversa. In the longer term, the Trans-Isthmic Corridor will be the home of at least five industrial parks, becoming a regional cluster for industries such as the energy sector. On a smaller scale, there are also plans to build roads that connect the Port of Coatzacoalcos with the nearby industrial areas in order to decrease the distance and transportation times of shipped goods.