Fitch Ratings has downgraded the debt of Mexico petrochemicals firm Braskem Idesa after state natural gas pipeline operator Cenagas cut off natural gas transport service to the firm’s Etileno XXI polyethylene complex in Veracruz state.

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With the transport service rescinded, Braskem Idesa was forced to shut down Etileno XXI, the largest petrochemicals operation in Latin America. The timeframe for resuming operations “is still highly uncertain,” said Fitch analysts led by Deborah Jalles.

“This event highlighted the ongoing disputes between Braskem Idesa and the Mexican government, which has indicated its desire to cancel and/or renegotiate the ethane contract Braskem Idesa has with” Mexican state oil company Petróleos Mexicanos (Pemex), the Fitch team said.

Amid its...