Prospects for the Petrochemical

Sector in Mexico

Mauricio Dávila
EnerChemTek
 I. Global Cracker Feedstock by Region

World
Ethane crackers will be the
most cost competitive

North America

Source: LYB

Source: ICIS
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II. The Tremendous Turnaround For The Ethylene/Polyethylene Value Chain

Crude Oil to Natural Gas Price Ratio

Source: LYB

• For the US the 2000-2004 recession was the worst in its history
– 26 PE production lines closed
• 2015-2020 surge in North America
– 15 worldscale PE production lines under construction
– 12 additional worldscale lines being planned
• Average capacity of each of these 27 PE production lines is 475 kilotons/year,
about 10x the capacity of plants closed
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III. Ethylene Cracker and PE Capacity Additions in North America

Kilotons per year

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IV.a Differentiated Prices of Polyethylene Commodity Grades

Source: EnerChemTek

• This chart applies to differentiated commodity grades

• PE Specialties can command price premiums 10 times over
conventional PE grades
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IV.b Opportunities Are Open For Specialties Also

• There are no specialty PE production facilities in Mexico

– The door is now open for new opportunities in specialties with much higher
margins compared to commodity PE, such as:
§ Plastomers & elastomers
§ Ultra-High molecular weight PE (UHMW-PE)
§ Others such as EVA, ionomers, wire & cable, medical
– Specialties can command price premiums of $350-$1,100 per ton over
conventional PE
• Examples of what has happened elsewhere when markets have been
opened:
– In Korea, SK developed technology to make plastomers & elastomers
§ It is now in a global alliance with SABIC to commercialize these technologies in Asia,
the Middle East and elsewhere
– In Saudi Arabia, SABIC has teamed up with ExxonMobil and Aramco has teamed
with Dow to produce ethylene-based polymer specialties
– In Korea, China & Brazil local PE producers have diversified into UHMWPE
§ Braskem Brazil from HDPE to UHMW-PE to UHMWPE fibers to ropes for the offshore
oil industry
– Now expanding UHMWPE in the USA
§ In China, Sinopec & others from HDPE to UHMWPE to fibers to ropes & ballistic
protection
§ In China, pipe manufacturers developed screw extrusion technologies for UHMWPE

Why not Mexico also?

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 V. Potential For Extruded UHMWPE Pipe

UHMWPE Pipe
• Compared to PE 100 HDPE pipe (the current high Source: Luoyang Guorun Pipes Co. Ltd.
performance benchmark), UHMWPE pipe offers:
– The same chemical resistance, non-toxicity and low
surface friction
– 2x the compressive strength for better survivability
– 60-65% better abrasion resistance
– Better resistance to hydrocarbons
– Resistance to very low temperatures

• Applications where these properties are an advantage

– Most mining operations that involve pumping of slurries
– Cement, concrete & building materials slurries Screw Extrusion of
UHMWPE
– Dredging mud slurries Source: BUCT
– Coal & ash handling slurries
– Applications in oil, gas & chemicals industries

• In China, the market is served by 15-20 UHMWPE UHMWPE Mining Pipe

Source: Slurry Pipes
pipe extruders and is already in excess of 20
kilotons/year
– China has by far the largest plastic pipe market in the
world, accounting for half global demand, and UHMWPE
pipe is expected to continue to grow very strongly
– The technology has been exported to Australia
– Other countries are expected to adopt the technology
over the next 5 years

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 VI. Select UHMWPE Rope/Fiber Applications

Mooring Ropes: The Offshore Oil & Gas Industry Shell’s Prelude Floating Liquefied
Natural Gas (FLNG) Facility

Source: Shell

Cryogenic Hoses vs. “Hard” Transfer Systems

The First Multigas Ship
Norgas Innovation

Source: Bahía Blanca GasPort, Argentina;

Source: Teekay

Source: I.G. Skaugen

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