Increased Ethane Imports Said Necessary to Keep Mexico Petchem Industry Afloat

Mexico will need to build out new infrastructure to import ethane in order to keep its petrochemicals industry afloat amid insufficient domestic natural gas production, according to local experts.

President Andrés Manuel López Obrador’s recent call to renegotiate or even cancel an ethane supply agreement between state oil company Petróleos Mexicanos (Pemex) and the Etileno XXI petrochemicals plant has underscored the challenges facing Mexico amid declining wet natural gas production by Pemex.

Ramping up ethane imports is “the only viable solution in the short and medium term,” IHS Markit’s Adrián Calcáneo, natural gas liquids (NGL) lead for Latin America and the Caribbean, told NGI’s Mexico GPI.

Pemex’s total natural gas output, including with joint...