Braskem Idesa, a joint venture between Brazil’s Braskem and Mexico’s Idesa Group, has announced an indefinite turnaround at its Etileno XXI Polyethylene complex after the abrupt halt of gas supplies from Mexico’s Natural Gas Control Centre (CENAGAS). The decision was primarily an outcome of the aggravated dispute between President Andres Manuel Lopez Obrador and the Brazilian Petrochemical Company.

CENAGAS notified that it will not supply any more Natural Gas to the company as their previous contract has already expired. On 30th November, CENAGAS restrained from renewal of the terms stated in the contract as the renegotiations asked by Braskem Idesa were one-sided and unfair. The resentment coincides with another tendentious agreement for Ethane supply at low prices to Braskem Idesa from Premex, a state-run oil company. Expressing its concerns over the astonishing cut of gas supplies, the company stated that they had been open for discussing issues regarding any discrepancy in agreement over the supply of gas from Mexican gas companies. The company even claimed that it is willing to safeguard its rights and investments within the framework of law as despite their open efforts the supply has been restricted to the plants. Braskem Idesa complex includes an Ethylene plant of 1.05 million metric tonnes per year along with three large-scale Polyethylene units. In the third quarter of 2020, it operated its plants at 85 percent capacity.

As per ChemAnalyst, “as Braskem Idesa is also an active importer of Ethane from the US, an indefinite plant turnaround at its facilities is anticipated to cause an intense financial distress as it has already spent around USD 4 million on its logistics infrastructure services.”