MEXICO CITY-- Mexico's President Felipe Calderon plans to change the means state oil company Petroleos Mexicanos (Pemex) markets petrochemical feedstock, possibly opening the door to a $1bn (Euro 680m) ethylene plant, he revealed on Tuesday.

" We are speaking about the relaunch of the country's petrochemical market," Calderon said in Spanish in a nationwide broadcast declaration. "This will certainly allow the development of a plant that will produce 1m tonnes/year of ethylene."

In a second stage, some $700m would certainly be spent downstream, he claimed.

ATMP claimed the plan is to "develop a system which, by means of a licensing procedure, will bring closer a market value or one that is actually establishes long-term supply prices."

State-run Pemex is the nation's largest tax contributor, and also its earnings are tightly regulated for government monetary reasons. The plan has actually been a long-standing issue of petrochemical manufacturers.

From 2000-2006 the Vicente Fox administration likewise tried to encourage a large expansion the nation's ethylene manufacturing capability. That plan, called Task Phoenix, ran stranded on refusal by the Money Ministry to enable Pemex to charge differentiated rates for feedstock.

Nevertheless, in 2007 the legislature revamped Mexico's tax obligation structure with an eye towards lowering power prices for commercial consumers, consisting of the petrochemical sector. The Mexican Us senate followed this action by attracting strategies to revive Mexico's petrochemical industry.

"The financial investment in this ethylene plant, which will certainly be embarked on by the private sector, is $1bn for the plant and also one more $700m even more in derivatives," claimed Calderon.

The framework announced by Calderon bears some resemblance to a strategy called under discussion by Jose Luis Zepada Pena, president of Mexican chemical sector body ANIQ in October. ANIQ proposed connecting gas costs to the petrochemical market cycle.

"When margins are good the federal government can bill a premium, when the marketplace is bad the federal government would certainly bill less. Sharing the riches when times are good and the danger when times misbehave," he said.