May 10, 2018 / 7:22 PM / a year ago

UPDATE 1-Brazil's Braskem to talk new naphtha contract with Petrobras- CEO

(Adds details)

By Alberto Alerigi

SAO PAULO, May 10 (Reuters) - Braskem SA will soon start to negotiate a long-term contract to buy naphtha from its shareholder Petroleo Brasileiro SA, the chief executive of the Brazilian petrochemical company said on Thursday.

Braskem CEO Fernando Musa said the current five-year supply contract, which is one of the largest held by Braskem with state-controlled Petrobras, ends in 2020. Petrobras sells 7 million tonnes of naphtha to Braskem annually, Musa said.

“We don’t want to start the negotiation too close to the deadline,” he told journalists.

Musa said the company has supply contracts abroad that may reach up to 20 years.

Musa said he expects Braskem’s U.S. unit to begin operations in its new polypropylene production unit in La Porte, Texas, in 2020. The company last year said the final phase of main construction on the new unit, which will be located next to its existing production facilities, was targeted for the first quarter of 2020.

Musa said Braskem will try to lead groups vying for the two refining companies in the northeast and southern Brazil that Petrobras plans to sell.

He declined to comment on the company’s previously announced project to unify its different share classes into a single common stock. (Writing by Tatiana Bautzer Editing by Marguerita Choy)

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