Nicolás Bracho
Energy Executive, North Region of Latin America
View from the Top

Setting the Future Petrochemical Agenda

Mon, 05/14/2018 - 13:26

Q: How will the expected increase in local oil and gas production impact the development of petrochemicals in Mexico?

A: It is still early to measure the impact on petrochemicals, since this sector takes a long time from the moment an operator is awarded an oil field to when it produces the first commercial molecule of gas, and then until the point it is used for the production of raw materials. We will start to see the results of the industry’s opening and the arrival of petrochemical players in about three years. Also, we have to bear in mind the process of building storage capacity and transferring gas from production fields to these plants, so any petrochemical company can use it. I am quite positive about the industry’s future in Mexico and I expect to see a reversal in the current downtrend in the country’s production from next year on.

Q: What opportunities does Dow see in the market as a world-class petrochemical company?

A: We are not yet undertaking any particular project in Mexico since our operations are based on real and solid availability of raw materials. We will have to wait for about two or three years for those to be available in Mexico. For now, we have assessed our options and we are looking to establish commitments with our main supplier, PEMEX, and then we will consider initiating projects. The reform brought many changes, with new rules and the ability to associate with private partners. This opens many opportunities that were previously closed to the private sector. For Dow, this means the possibility to look for new opportunities with PEMEX.

Q: How will the petrochemical sector enact the reform’s objectives for a consolidated industry?

A: The US has seen a peak in raw materials based on the availability of shale gas and the extensive resources found in the Texas and Louisiana basins, where Dow has plants installed. Mexico’s proximity to the US and the open interaction between both markets linked by trains, roads and boats push petrochemical companies to take advantage of different aspects, such as the availability of raw materials. The boom in shale gas in the US and Dow’s plans to expand its activities in the coastal region of the Gulf of Mexico will play a big role in the development of petrochemicals in Mexico in the future. But for us to consider more projects in Mexico, there must be changes here regarding the availability of raw materials and their use for the petrochemical industry. Mexico has played by the rules and it is undoubtedly attractive for investment. PEMEX has changed, opening itself to discussions of projects and plans.

Q: What technological innovations can Dow introduce to the Mexican market?

A: Dow uses state-of-the-art technologies and processes for petrochemicals. We have been building units in different corners of the world with this technology, and this is something we plan to introduce when our operations in the country are in full swing. We are pioneers in HSE activities and we have consolidated a solid presence through our sustainability programs in the countries where we operate. We use the best practices in this area and we participate in associations that can improve our practices further in transportation, delivery and usage of our chemicals.

Q: What value proposition does the Responsible Care initiative add to Dow and its operations?

A: We are members of the Responsible Care initiative. It is a program created by the US chemical industry and implemented in Mexico by the National Association of the Chemical Industry (ANIQ). It implies a set of norms, rules, procedures and practices for all aspects of chemicals management.

Most distributors and producers of chemicals in Mexico signed this program and they are audited and constantly trained to follow international practices in a coordinated effort for chemicals worldwide.