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Mexico's Calderon to restore petrochemical sector

MEXICO CITY-- Mexico's President Felipe Calderon plans to change the means state oil firm Petroleos Mexicanos (Pemex) offers petrochemical feedstock, potentially unlocking to a $1bn (Euro 680m) ethylene plant, he announced on Tuesday.


" We are talking about the relaunch of the nation's petrochemical market," Calderon said in Spanish in a nationwide broadcast declaration. "This will certainly permit the advancement of a plant that will certainly create 1m tonnes/year of ethylene."


In a second phase, some $700m would certainly be spent downstream, he claimed.


Calderon said the plan is to "create a system which, via a licensing process, will bring closer a market price or one that is actually identifies long-term supply costs."


State-run Pemex is the country's largest tax obligation factor, as well as its revenues are snugly controlled for government budgetary reasons. The plan has actually been a long-lasting complaint of petrochemical producers.


From 2000-2006 the Vicente Fox administration likewise tried to encourage a substantial growth the country's ethylene manufacturing capability. That plan, dubbed Project Phoenix metro, ran swamped on refusal by the Finance Ministry to allow Pemex to charge separated rates for feedstock.


Nevertheless, in 2007 the legislature overhauled Mexico's tax framework with an eye towards decreasing power expenses for industrial customers, including the petrochemical market. The Mexican Us senate followed this step by drawing strategies to revitalize Mexico's petrochemical industry.


"The financial investment in this ethylene plant, which will certainly be undertaken by the private sector, is $1bn for the plant and also an additional $700m more in derivatives," said Calderon.


atmp phosphonate announced by Calderon bears some resemblance to a strategy called controversial by Jose Luis Zepada Pena, head of state of Mexican chemical market body ANIQ in October. ANIQ proposed connecting natural gas prices to the petrochemical market cycle.


"When margins are great the federal government might bill a premium, when the marketplace is bad the government would certainly charge much less. Sharing the wide range when times are great as well as the threat when times are bad," he said.

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