Magazine article SourceMex Economic News & Analysis on Mexico

Energy Secretariat Announces New Scheme to Attract Private Investment to Two Petrochemical Plants

Magazine article SourceMex Economic News & Analysis on Mexico

Energy Secretariat Announces New Scheme to Attract Private Investment to Two Petrochemical Plants

Article excerpt

President Ernesto Zedillo's administration has proposed a new scheme to attract investors into two petrochemical projects without having to give up state control of the facilities. The proposal aims to bring badly needed private investment to modernize and expand the Morelos and La Cangrejera petrochemical complexes.

The proposal complies with the requirement in the Mexican Constitution that the government retain majority ownership in energy projects, sources at the Secretaria de Energia (SE) told the daily newspaper Reforma.

Under the plan, all existing facilities at La Cangrejera and Morelos would remain the property of Pemex-Petroquimica, a subsidiary of the state-run oil company PEMEX. But companies participating in the projects would retain control of additional buildings or structures that are added to the complexes. The ethylene and other chemicals produced at the facilities would be divided between Pemex-Petroquimica and the private investors.

Mexican, foreign companies express interest in plan

Several companies have expressed interest in participating in the project, including US-based Dow Chemical Co., Canada's Nova Chemicals Corp., Spain's Repsol SA, and Mexican companies Grupo Alpek and Grupo Idesa. Under the plan, Mexican companies would be given preference.

But any private participation in the plan proposed by the government would most likely involve Mexican-foreign partnerships, said sources at the Asociacion Nacional de la Industria Quimica (ANIQ). …

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