November 13, 2018 / 6:30 PM / 10 months ago

Braskem does not want to redraft Pemex ethane deal

SAO PAULO, Nov 13 (Reuters) - Brazilian petrochemical firm Braskem does not intend to renegotiate its 20-year ethane supply contract with Mexican state-owned oil company Pemex, but is open to alternatives depending on the stance of the incoming Mexican administration, the company said on Tuesday in a call with analysts.

Under the terms of the current deal, Pemex has had to supply ethane to Braskem-Idesa, a consortium led by a unit of graft-stained Brazilian construction firm Odebrecht, well below current market prices.

Energy aides to President-elect Andres Manuel Lopez Obrador, who takes office Dec. 1, have said the contract is problematic, but have not yet said what the new government will do about it.

Braskem President Fernando Musa said on Tuesday that Pemex is having to import ethane from the United States to honor the contract with the Brazilian petrochemicals company, which operates a $5.2 billion petrochemical complex in Mexico that began operating in 2015.

“We have a very strong contract with Pemex, we intend to collaborate with Pemex, we do not want them to have the option of ‘delivery or payment.’ We want to operate the plant in the best way,” Musa told investors during a conference call to discuss Braskem’s third-quarter results.

Rocio Nahle, Lopez Obrador’s pick to be Mexico’s new energy minister, has said the incoming government will review the Braskem-Idesa contract for possible signs of corruption, part of a broader energy contract review. (Reporting by Alberto Alerigi Jr. Editing by Marguerita Choy)

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