Thirteen Dead, 18 Remain Missing After Mexico Chemical Blast

  • Explosion, fire closes unit operated by Pemex and Mexichem
  • Mexichem will probe blast, shares fall most in three months

Thirteen people died and an additional 18 remain missing after an explosion Wednesday at a petrochemical plant at an oil export terminal along Mexico’s Gulf Coast.

“We toured the affected area of the complex, unfortunately preliminarily located 13 people dead," Mexican Civil Protection Coordinator Luis Felipe Puente said on Twitter Thursday.

Petroleos Mexicanos, the state-owned oil company, confirmed the death toll in its own post. The company said a fire began around 3 p.m. and was followed by a large explosion. A total of 136 people were injured in the blast and 24 remain hospitalized, including 13 in critical condition, Jose Antonio Gonzalez Anaya, Pemex’s chief executive officer, said in an interview on Radio Formula. Gonzalez Anaya, who flew to the site in Coatzacoalcos Wednesday, said that rebuilding the plant may take a year.

The accident is the latest mishap for Pemex as the company struggles to tackle aging infrastructure, illegal fuel taps and mounting debt. In February, a fire killed a worker at the plant and last year, a blaze at a Gulf of Mexico platform left seven dead and caused about $780 million in losses.

Mexichem Unit

Mexichem SAB, which operates a unit at the Pajaritos complex in a venture with Pemex, will conduct an investigation to determine the cause of the accident, according to a statement filed with the Mexican Stock Exchange late Wednesday. Mexichem, which owns 56 percent of the joint venture with Pemex, fell 5.2 percent to 43.44 pesos in Mexico City, the biggest loss since January 2015.

The Mexichem unit at the complex produces around 1,000 tons a day of ethylene, according to Alik Garcia, equity analyst at Intercam Casa de Bolsa SA. The explosion occurred when a raw material used in the production of vinyl leaked and heated, Gonzalez Anaya told Radio Formula. The vinyl product was used to make PVC pipes and uses chlorine and ethylene, he said.

“It’s unlikely that Mexichem is going to reach output goals this year," Garcia said in a phone interview from Mexico City. "The fall in shares today is justified and it is likely that we are going to continue to see pressure on the shares in the short term."

Hundreds Waiting

Hundreds of people have been gathered outside of the chlorinate 3 plant in Coatzacoalcos since early morning waiting to be allowed inside to identify the bodies of family members and friends. The dark plumes of smoke that hovered over the plant Wednesday have almost dissipated but the putrid smell of chemicals remains, forcing many to cover their noses or don facemasks as they wait.

Rosa Villalobos de Ruiz, 46, said she doesn’t know whether her son Luis Alfonso, a welder at the plant, is dead or alive. “I’ve come here to find out,” she said, casting a glance at the rows of armed military police blocking the entrance.

Sergio Sanchez, 46, a superintendent at the company Prometalica who is helping to identify missing workers inside the plant, described the scene as “carnage.”

“Everything is destroyed, there is debris everywhere," he said.

Pemex Woes

Gonzalez Anaya was in New York earlier this week where he and Finance Minister Luis Videgaray assured investors that Pemex is taking measures to overcome a liquidity crunch from low oil prices and declining production. The company is looking to cut 100 billion pesos ($5.77 billion) in spending this year to stem losses, which reached $32 billion last year.

Gonzalez Anaya said that he’s looking to sell a stake in his company’s refining facilities. Pemex is pushing to bring in foreign partners to help modernize plants and reverse a decline in oil production. 

"We lose our shirts on refining," he said in an interview Tuesday at Bloomberg headquarters in New York. "They’re not great assets."

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