Mexico's cutoff of natural gas to Braskem Idesa forces shutdown; Formosa starts LDPE unit; Braskem announces development of sugar-based MEG; Total to produce renewable aviation fuel
Mexico’s cutoff of natural gas to Braskem Idesa’s ethylene/PE plant forces shutdown
Braskem Idesa said on Dec. 2 that the Mexican government natural gas authority abruptly cut deliveries to its 1 million tonne per year polyethylene plant in Veracruz, that also includes an ethylene cracker, forcing an unsafe shutdown.
Braskem Idesa received information on Nov. 30 from Mexico’s National Center for the Control of Natural Gas (CENAGAS) that it would not renew a contract to transport natural gas to Braskem-Idesa, before it abruptly shut service hours later, it said.
“It also blocked the following day, in breach of a contract of uninterrupted (service) in effect, and without considering Braskem Idesa needs 48 hours of reduced supply to shut down operations safely for people, neighbors and the environment,” it added.
Braskem Idesa said the interruption of gas deliveries has caused problems for the plant, customers, suppliers, employees and hundreds of businesses that are part of the supply chain of the plant, which started up operations in 2016.
“The decision violates our rights, including judicial dispositions currently in effect,” it added.
The shutdown was the latest development in a dispute between Braskem and the Mexican government.
Mexican President Andres Manuel Lopez Obrador had said in August that losses to Mexicans related to what it described as an unfavorable accord that implied “influences and bribes” to favor Braskem exceeded $683 million.
Braskem Idesa is majority owned by Braskem which in turn is majority owned by Brazilian construction company Odebrecht.
In Dec. 2016 Odebrecht and Braskem pleaded guilty in the U.S. District Court for the Eastern District of New York and agreed to pay $3.5 billion to resolve charges with authorities in the U.S., Brazil and Switzerland related to the biggest foreign bribery case in history. The trial did not involve any corruption accusation related to Mexico.
Braskem has denied any wrongdoing in Mexico. It has insisted on collecting contractual fines from Mexico over failure to meet agreed volumes of ethane needed to be cracked into ethylene. Braskem said in August it was involved in negotiations with Mexican officials.
Formosa starts up LDPE unit in Texas
Formosa Plastics Corp. announced on Nov. 30, 2020 the startup of its 400,000-tonne low-density polyethylene (LDPE) unit in Point Comfort, Texas.
It occurred nearly a year after the original plans.
“The LDPE unit significantly expands the portfolio of products we provide to our customers,” said Ken Mounger, Formosa’s executive vice president, according to a press release.
The facility startup is the last part of a construction expansion that included a high-density polyethylene unit (HDPE) and a linear-low density polyethylene unit (LLDPE), both already in operation, as well as new ethylene capacity also in operation.
On Nov. 25, 2019 the American unit of Taiwan-based Formosa had anticipated the startup of the LDPE unit along with a new ethylene plant by December 2019. A unit that can switch between HDPE and LLDPE had started in August of that year.
However, only the 1.5 million tonnes ethylene plant started on Jan 22. The LDPE startup was pushed to April, but no confirmation ever arrived nor a notice of a delay.
The LDPE startup marks the completion of a project conceived as far back as 2012 with construction starting in 2015. The spending was at least $5 billion, according to an estimate provided around the time of the construction start.
Braskem and Denmark’s Haldor Topsoe develop sugar-based MEG
Brazil-based Braskem and Denmark-based catalyst producer Haldor Topsoe announced on Nov. 23 the “first-ever demo-scale production of bio-based monoethylene glycol (MEG).”
The demonstration unit in Lyngby, Denmark managed to process sugar into renewable MEG, a press release said.
MEG is a raw material for PET (polyethylene terephthalate) used in textiles (polyester) as well as packaging, especially beverage bottles.
The global MEG market is worth about $25 billion, the release added.
“The technology will also co-produce, in a lower quantity, monopropylene glycol (MPG). The companies haven’t yet decided whether to pursue a commercial scale.
Braskem has 40 industrial units in its home country Brazil, the U.S., Mexico and Germany with about $13 billion net annual revenue, it added.
France’s Total, U.S.-based Honeywell partner to produce renewable aviation fuel
Illinois-based Honeywell and France’s Total announced on Nov. 13, 2020 plans to produce renewable fuels primarily for aviation in a north-central France location.
Honeywell is supplying the equipment and licenses for a bio-refinery In Seine-et-Marne that will process 400,000 tons of feedstock per year, producing up to 170,000 tons of sustainable aviation fuel, 120,000 tons of renewable diesel and 50,000 tons of renewable naphtha.
Earlier this year, France announced plans to replace 2% of its fossil-based jet fuel with sustainable aviation fuels by 2025, rising to 5% by 2030 and to 50% by 2050, according to the press release.
U.S. commercial flights see on-month decline in Sept.; nearly half of 2019
Ten carriers in the United States reported for September 342,771 operating flights, down from 394,143 in August, the U.S. Department of Transportation (DOT) said on Nov. 25.
The number of flights nearly halved from last year. Carriers had reported 660,712 flights in September 2019.
The airlines originally scheduled 345,294 for September 2020 but canceled 2,523 flights. The DOT tallies cancelations if they occur within seven days of the flight date.
Aviation, and the demand for jet fuel, were hit the hardest of all fuels by Covid-19. The number of flights fell to an all-time low in May of 180,151.
Gasoline fell deepest at the pandemic start but recovered fast as lockdowns eased.
U.S. chemical production saw gains in October
U.S. production of major plastic resins totaled 7.7 billion pounds during October 2020, an 8.2% on-month increase, and a 5.6% on-year increase, the American Chemistry Council (ACC) said on Dec. 1.
Year-to-date production was 75.0 billion pounds, a 1.8% increase from 2019.
By Reuters Events Downstream