Houston — State-owned Pemex registered its highest olefins production total in 19months as it took advantage of additional feedstock to increase capacityutilization rates at its petrochemical plants, data released Thursday by theMexican company show.
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Register NowOverall, Pemex produced a combined 62,445 mt of ethylene, propylene andcrude butadiene in May, up 13,591 mt or 27.8% month on month and 11,712 mtor 23.1% compared with May 2017, the data show. May's total was Pemex'shighest since producing a combined 69,048 mt of olefins in October 2016.
The majority of Pemex's olefins production comes in the form of ethylenevia a pair of gas-fed steam crackers, with the company regularly running theunits at reduced rates due to a consistent lack of feedstock.
Pemex feeds the each of the crackers a mix of roughly 90% ethane and 10%propane, and the company has struggled with ethane extraction in recentmonths.
Pemex in May produced 58,293 mt of ethylene, up 13,093 mt or 29% comparedwith April and 10,497 mt or 22% when compared with May 2017. Last month'sethylene output was Pemex's highest in 19 months, dating back to October 2016when the company produced 64,896 mt of ethylene.
COMPETITOR MAINTENANCE AIDS SUPPLY
Pemex's production increase in May, however, was not fueled by a risein ethane production, but was still expected, company sources previously toldS&P Global Platts.
The extra ethylene output came due to fellow Mexican polymer producerBraskem Idesa undertaking a planned maintenance, which in turn freed up ethanethat Pemex would normally transfer on a contract basis.
A 75:25 joint venture between Brazilian petrochemical giant Braskem andMexico's Grupo Idesa, Braskem Idesa's petrochemical complex in thesoutheastern state of Veracruz has a nameplate production capacity of 1.05million mt/year of ethylene and polyethylene each.
Braskem Idesa has a 20-year contract with Pemex for the supply of ethanefor cracking at the Veracruz complex, formerly known as Etileno XXI. BraskemIdesa began ethylene and polyethylene production in the second quarter of2016, spending the rest of the year ramping up PE production as it increasedcracker capacity utilization rates in the third quarter and fourth quarter.This period coincided with Pemex ethylene and PE production decreasing in Q42016.
Pemex's supply deal with Braskem Idesa calls for it to provide 66,000 b/dof ethane for 20 years, and Pemex has typically produced around100,000-115,000 b/d overall in recent years, according to company sources.
However, internal Pemex analysis in late 2017 called for a 20% reductionin overall output, leaving it with around 80,000-90,000 b/d to supply BraskemIdesa and still run its own steam crackers at Cangrejera and Morelos, whichcan consume up to 68,000 b/d of ethane combined if run at full rates. A thirdPemex ethylene plant, capable of consuming up to 11,000 b/d of ethane, has satidle since April 2016 after a deadly explosion and fire at adjacent downstreamcapacity halted operations.
Pemex's reduced ethane output stems from lower wellhead ethane output insouthern Mexico as a result of elevated nitrogen levels and compression issuestrimming overall NGL production in the region, company sources have said.
Pemex in May produced an average of 84,559 b/d of ethane, its lowesttotal since at least January 1990, according to company records. Last month'stotal ethane output was down 7,084 b/d or 7.7% from April and 19,927 b/d or19.1% compared with May 2017.
MIXED BAG FOR PROPYLENE, CC4
In addition to ethylene, Pemex's crackers produce propylene and crudebutadiene -- also known as crude C4, or CC4 -- and output of both has beenslightly hampered by the feedstock issues, although to a lesser degree asco-products from an ethane-rich feed.
Pemex also produces propylene via fluid catalytic cracking units at itsSalina Cruz and Minatitlan refineries, both of which have undertakenmaintenance projects and seen unexpected shutdowns in recent months.
Pemex in May saw its overall propylene output fall for a second straightmonth to 1,531 mt, a decrease of 60 mt or 3.9% from April. Still, last month'soutput outpaced that of May 2017 by 611 mt (71%), according to Pemex. Thedecrease in production is related to the lower feedstock supply that forced ashutdown of Minatitlan's fluid catalytic crackers in May, a company sourcesaid.
Pemex's CC4 production rebounded in May, totaling 2,681 mt for itshighest total in 19 months. Last month's CC4 output was 558 mt or 26.3% higherthan April's and up 604 mt or 29.1% when compared with May 2017. All ofPemex's CC4 is exported for processing, with the resulting butadiene beingimported back into Mexico, as the country does not have traditional butadieneproduction capabilities, according to market sources.
--Phillipe Craig, phillipe.craig@spglobal.com
--Edited by Keiron Greenhalgh, keiron.greenhalgh@spglobal.com