Mexico cuts natural gas supply to Braskem plant
Mexico's state-owned pipeline administrator Cenagas cut natural gas supply to Braskem Idesa's Ethylene XXI plant based on corruption allegations.
"The company will have no more natural gas because the contract has expired — supply was not interrupted — and it will not be renewed," President Andres Manuel Lopez Obrador said today.
Braskem Idesa's natural gas transport contract expired at the end of November. Cenagas decided not to renew it given alleged corruption in the awarding of the contract, a government official told Argus today.
Gas transport contracts would usually only be cancelled or not renewed in the event of failure to pay, a former Cenagas official told Argus.
Braskem Idesa's 58,771 GJ/d gas transport contract — required to power operations at its plant — started on 1 July 2017 and expired on 30 November, according to information from the Cenagas electronic bulletin board.
The plant has been at the center of a long-running corruption investigation linked to Braskem's parent company, Brazil's Odebrecht.
President Andres Manuel Lopez Obrador has repeatedly called for cancellation of state-owned Pemex's 20-year contract — signed in 2010 — to sell ethane to the ethylene plant at below-market cost.
The contract has proven controversial as, in addition to the below-market rates, Pemex has been forced to make costly ethane imports to meet demand in its own ethylene plants.
Pemex's ethane production from wet gas processing — which is essential to meet contractual commitments to the plant — dropped to a five-year low of 61,000 b/d in October, down from the 80,000 b/d produced in October last year and down from 70,000 b/d in the previous month.
Following the failure of Braskem Idesa and Pemex to renegotiate terms, Lopez Obrador said he had ordered cancellation of the contract on 13 November. Braskem Idesa maintained at the time that the contract remained valid.
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Japan’s Jera to handle 35mn t/yr LNG until FY2035-36
Japan’s Jera to handle 35mn t/yr LNG until FY2035-36
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Low-carbon methanol costly EU bunker option
Low-carbon methanol costly EU bunker option
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Chinese importers seek five LNG cargoes for Jun-Sep
Chinese importers seek five LNG cargoes for Jun-Sep
Shanghai, 15 May (Argus) — Five Chinese importers, mostly second-tier buyers, are each seeking one LNG cargo for June-September delivery, according to an official notice published by China's national pipeline operator PipeChina on 15 May. The five importers are PipeChina, Chinese independent ENN, Hong Kong-listed city gas firm China Resources Gas, Hong Kong-based Towngas and state-owned China Gas. PipeChina and ENN have indicated a target price of at most $9.50/mn Btu for their intended cargoes, both for delivery to PipeChina's 6mn t/yr Tianjin terminal. China Gas has indicated a target price of at most $9.30/mn Btu for delivery to PipeChina's 6mn t/yr Beihai termial. China Resources Gas and Towngas have both indicated a target price of at most $9/mn Btu for delivery to PipeChina's 2mn t/yr Yuedong and Tianjin terminals, respectively. This consolidated requirement came about because of a need for PipeChina to better leverage on its infrastructure advantages and, at the same time, meet the varying needs of gas importers and consumers in the country. But this requirement comes at a time when spot LNG prices are still somewhat higher than the importers' targeted prices. But the importers can choose not to buy if offers are not within their expectations. The front-half month of the ANEA, the Argus assessment for spot LNG deliveries to northeast Asia, was last assessed at $10.485/mn Btu on 15 May. Chinese importers mostly perceive spot prices below $9-9.50/mn Btu for June-September deliveries to be unattainable for now because there is strong buying interest from south and southeast Asia in particular. Indian state-controlled refiner IOC most recently bought LNG for delivery between 22 May and 15 June at around $10.60/mn Btu, through a tender that closed on 14 May. Thailand's state-controlled PTT most recently bought three deliveries for 9-10 July, 16-17 July and 22-23 July through a tender that closed on 13 May , at just slightly above $10.50/mn Btu. The most recent spot transaction was Japanese utility Tohoku Electric's purchase of a 10-30 June delivery at around $10.55/mn Btu through a tender that closed on 14 May . This is at least $1/mn Btu higher than Chinese importers' indications. Summer requirements have so far been muted but concerns among buyers about potential supply disruptions remain. Malaysia's 30mn t/yr Bintulu LNG export terminal suffered a power loss on 10 May, but this issue may have been resolved as of early on 15 May, according to offtakers. Some unspecified upstream issues may still be affecting production at the Bintulu facility, resulting in Malaysia's state-owned Petronas having to ask some of its buyers for cargo deferments, according to offtakers. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s NS United plans methanol-fuelled bulk carriers
Japan’s NS United plans methanol-fuelled bulk carriers
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