State-owned Pemex registered its highest olefins production total in 19 months as it took advantage of additional feedstock to increase capacity utilization rates at its petrochemical plants, data released Thursday by the Mexican company show.
Overall, Pemex produced a combined 62,445 mt of ethylene, propylene and crude butadiene in May, up 13,591 mt or 27.8% month on month and 11,712 mt or 23.1% compared with May 2017, the data show. May's total was Pemex's highest since producing a combined 69,048 mt of olefins in October 2016.
The majority of Pemex's olefins production comes in the form of ethylene via a pair of gas-fed steam crackers, with the company regularly running the units 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 recent months.
Pemex in May produced 58,293 mt of ethylene, up 13,093 mt or 29% compared with April and 10,497 mt or 22% when compared with May 2017. Last month's ethylene output was Pemex's highest in 19 months, dating back to October 2016 when the company produced 64,896 mt of ethylene.
COMPETITOR MAINTENANCE AIDS SUPPLY
Pemex's production increase in May, however, was not fueled by a rise in ethane production, but was still expected, company sources previously told S&P Global Platts.
The extra ethylene output came due to fellow Mexican polymer producer Braskem Idesa undertaking a planned maintenance, which in turn freed up ethane that Pemex would normally transfer on a contract basis.
A 75:25 joint venture between Brazilian petrochemical giant Braskem and Mexico's Grupo Idesa, Braskem Idesa's petrochemical complex in the southeastern state of Veracruz has a nameplate production capacity of 1.05 million mt/year of ethylene and polyethylene each.
Braskem Idesa has a 20-year contract with Pemex for the supply of ethane for cracking at the Veracruz complex, formerly known as Etileno XXI. Braskem Idesa began ethylene and polyethylene production in the second quarter of 2016, spending the rest of the year ramping up PE production as it increased cracker capacity utilization rates in the third quarter and fourth quarter. This period coincided with Pemex ethylene and PE production decreasing in Q4 2016.
Pemex's supply deal with Braskem Idesa calls for it to provide 66,000 b/d of ethane for 20 years, and Pemex has typically produced around 100,000-115,000 b/d overall in recent years, according to company sources.
However, internal Pemex analysis in late 2017 called for a 20% reduction in overall output, leaving it with around 80,000-90,000 b/d to supply Braskem Idesa and still run its own steam crackers at Cangrejera and Morelos, which can consume up to 68,000 b/d of ethane combined if run at full rates. A third Pemex ethylene plant, capable of consuming up to 11,000 b/d of ethane, has sat idle since April 2016 after a deadly explosion and fire at adjacent downstream capacity halted operations.
Pemex's reduced ethane output stems from lower wellhead ethane output in southern Mexico as a result of elevated nitrogen levels and compression issues trimming overall NGL production in the region, company sources have said.
Pemex in May produced an average of 84,559 b/d of ethane, its lowest total since at least January 1990, according to company records. Last month's total ethane output was down 7,084 b/d or 7.7% from April and 19,927 b/d or 19.1% compared with May 2017.
MIXED BAG FOR PROPYLENE, CC4
In addition to ethylene, Pemex's crackers produce propylene and crude butadiene -- also known as crude C4, or CC4 -- and output of both has been slightly hampered by the feedstock issues, although to a lesser degree as co-products from an ethane-rich feed.
Pemex also produces propylene via fluid catalytic cracking units at its Salina Cruz and Minatitlan refineries, both of which have undertaken maintenance projects and seen unexpected shutdowns in recent months.
Pemex in May saw its overall propylene output fall for a second straight month to 1,531 mt, a decrease of 60 mt or 3.9% from April. Still, last month's output outpaced that of May 2017 by 611 mt (71%), according to Pemex. The decrease in production is related to the lower feedstock supply that forced a shutdown of Minatitlan's fluid catalytic crackers in May, a company source said.
Pemex's CC4 production rebounded in May, totaling 2,681 mt for its highest total in 19 months. Last month's CC4 output was 558 mt or 26.3% higher than April's and up 604 mt or 29.1% when compared with May 2017. All of Pemex's CC4 is exported for processing, with the resulting butadiene being imported back into Mexico, as the country does not have traditional butadiene production capabilities, according to market sources.
