Braskem reaches ethane supply deal with Pemex, including new terminal

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The logo of the Mexican state oil firm PEMEX is pictured in Cadereyta on the outskirts of Monterrey, Mexico August 6, 2020. REUTERS/Daniel Becerril/File Photo

SAO PAULO, Sept 28 (Reuters) - Brazilian petrochemical producer Braskem (BRKM5.SA) said on Tuesday its Mexican subsidiary Braskem Idesa has reached a new gas supply agreement with Petroleos Mexicanos (Pemex) (PEMX.UL) to settle differences between the companies and build a $400 million ethane terminal.

According to a securities filing, the new terminal for ethane imports would fulfill Idesa's needs for the raw material. Pemex, Pemex Logistica and other unnamed government entities will support the terminal construction.

In a separate statement, Braskem Idesa said the terminal would require investments of about $400 million. The asset is expected to be located at Laguna de Pajaritos, in Coatzacoalcos, Veracruz.

Brazil-traded shares of Braskem rose roughly 1% in morning trading in Sao Paulo, outperforming the broader Bovespa index (.BVSP), which fell 2%.

The Brazilian company has also reached a new deal for the supply of at least 30,000 barrels of ethane per day until the new import terminal becomes operational in the second half of 2024 or by February 2025 at the latest.

The deal settles a long-running conflict between the companies, as Mexico's government weighed canceling the Pemex ethane supply contract with Braskem Idesa last year due to its high costs.

Pemex had announced in March an agreement with Braskem for the delivery of 30,000 barrels of ethane per day until 2024, while the previous contract - signed in 2010 - determined the supply of 66,000 barrels per day for 20 years. read more

The new contract also gives Braskem Idesa a pre-emptive right to acquire all of the ethane available for Pemex that the Mexican company would not use until 2045 at prices in line with international markets, Braskem added.

Reporting by Carolina Mandl and Gabriel Araujo in Sao Paulo Editing by Jason Neely and Matthew Lewis

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