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Braskem-Idesa Integrated Polyethylene Production Plant, Veracruz, Mexico

Key Data

Braskem-Idesa Integrated Polyethylene Production Plant, Veracruz

Braskem-Idesa is building a new integrated polyethylene production plant in Mexico. The project, named Ethylene XXI, will be the largest private petrochemical facility in Mexico.

It is being built in the city of Nanchital in the municipality of Veracruz, in south-east Mexico. It will produce 1.05mt of polyethylene a year from ethane.

Braskem-Idesa is a joint venture between Brazilian petrochemical company Braskem and a Mexican petrochemical group, Grupo Idesa. Braskem and Idesa respectively hold 65% and 35% interest in the joint venture.

The purpose of the project is to reduce the gap between Mexico's local polyethylene production and demands, which are currently being met by importing one million tonnes of polyethylene every year.

The joint venture will own and operate the polyethylene production facility. The construction of the facility is estimated to cost approximately $3.2bn, which will represent the biggest foreign direct investment (FDI) in Mexico by a private Brazilian company.

Construction on the project commenced in May 2012 after receiving clearance from the Ministry of Environmental and Natural Resources.

The engineering, procurement and construction (EPC) contractor for the project is the joint venture of Odebrecht (40%), Technip (40%) and ICA Fluor (20%).

Financing the Mexican chemical plant

"The purpose of the project is to reduce the gap between Mexico's local polyethylene production and demands."

The project is being funded by two types of loans - the 'A Loan' and 'B Loan', and another $600m being provided by Italian credit bureau - SACE.

The 'A Loan' includes $300m sanctioned by the Inter-American Development Bank (IDB) in April 2012 and another $300m sanctioned by the International Finance Corporation in May 2012.

The 'B Loan' is being arranged by a group of financial institutions, including the development bank of Brazil and Mexico, Brazilian National Economic and Social Development Bank (BNDES), Bancomext and Nacional Financiera.

The financing deal was realised in December 2012 under the advisory of Sumitomo Mitsui Banking Corporation (SMBC). The international and Mexican legal advisor for the owner of the plant was White & Case.

HDPE and LDPE plants at the petrochemical complex

The integrated petrochemical complex will comprise of an ethane cracker, two high density polyethylene (HDPE) plants and a low density polyethylene plant (LDPE). The ethane cracker will have a nominal capacity of about one million tonnes per annum.

The first HDPE plant will have a capacity of approximately 400,000t per annum, while the second HDPE plant will produce 350,000t of polyethylene per annum. The LDPE will have a nominal production capacity of 300,000t per annum.

Construction of the polyethylene production facility

The Ethylene XXI project is being developed on a 192ha land parcel located within a petrochemical complex, which is located in the port city of Coatzacoalcos. The new plant will use 117ha, or approximately 61% of the total area of the land parcel.

"Braskem-Idesa is a joint venture between Brazilian petrochemical company Braskem and a Mexican petrochemical group."

Around 17ha will be used during construction and then re-vegetated, and 30ha will be apportioned for a permanent conservation area. The remaining 28ha is already in use by PEMEX pipelines through right of ways.

The front-end engineering and design (FEED) of the plant was completed in December 2011. The site preparation / land movement began in October 2011.

Construction on structural components of the petrochemical complex was started in November 2012. Electromechanical assembly works are scheduled to commence in early 2013.

The project is expected to generate more than 9,000 jobs during the peak construction period. Another 3,000 direct and indirect jobs will be created once the facility begins operations in mid-2015.

Innovene S slurry and Lupotech T technology

Process technologies for downstream production as well as upstream production have been finalised. The twin HDPE plants will be based on Innovene S slurry high density PE technology developed by INEOS Technologies.

The Innovene S slurry process requires low investment and operating costs. It features two-reactor bimodal technology and combines circulation, heat exchange and reaction volume, all in one system.

The lone LDPE plant will be based on LyondellBasell's Lupotech T process technology, one of the world's most widely used high-pressure LDPE processes. Technology for the upstream ethylene cracker plant will be supplied by Technip.

Ethane feedstock delivered by Pemex Gas

Ethane that will be used as raw material for the Veracruz polyethylene manufacturing facility will be supplied by Pemex Gas y Petroquímica Básica (Pemex Gas).

As per an agreement signed between Braskem-Idesa and Pemex Gas in November 2009, the latter will supply 66,000 barrels of ethane a day for a period of 20 years.

The project is located in close proximity to the Pemex facilities, which provides easy access to ethane. The site also has easy access to highways, rail-roads and ports. In addition, there is a potential for the installation of new warehouses.

Pipelines at Braskem-Idesa's Mexican plant

An underground pipeline measuring 800m in length will be installed by Pemex to supply the required ethane. An alternate ethylene supply pipeline of 1.6km will also be laid from the Pemex facility to the polyethylene plant.

Additional infrastructure to support the project will include a 3.7km underground pipeline to source water from the La Cangrejera water system and a 1.6km underground pipeline for natural gas supply, plus a five kilometre power transmission line from a nearby substation.

Contractors involved in Nanchital's Ethylene XXI project

"The Ethylene XXI project is being developed on a 192ha land parcel located within a petrochemical complex."

In early 2011, Odebrecht-ICA Fluor was hired to provide basic engineering services for the off-site installations.

In March 2011, Technip was contracted to provide the front-end engineering design (FEED) of the cracker and HDPE plants. Technip is also providing its technology for the ethylene cracker plant.

Mitsubishi Heavy Industries Compressor Corporation (MCO), a wholly-owned subsidiary of Mitsubishi Heavy Industries (MHI), was involved in March 2012 for the supply of five compressors and three steam turbines for the facility.

GE was contracted in April 2012 to supply its hyper compressor and booster compressor technologies for the LDPE plant.

In October 2012, Odebrecht, Technip and ICA Fluor joint venture won a $2.7bn contract to provide engineering, procurement and construction (EPC) services for the petrochemical complex.

Engineering and procurement (EP) services for the LDPE unit will be provided by Tecnimont, a subsidiary of Maire Tecnimont, as part of a $191.4m contract awarded in December 2012. This part of the project is expected to be realised in the last quarter of 2014.

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