Two weeks into his six-year administration, President Andres Manuel López Obrador is beginning to reveal his plans to boost PEMEX and Mexican oil production. The main goal: energy sufficiency, maximize social and economic benefits and detonate development in the southeast region of the country. AMLO and Rocío Nahle, the new Minister of Energy, presented the National Refining Plan on Sunday. (All quotes from Rocío Nahle ) Here is the breakdown:
THE REASONING BEHIND THE NEW PLAN
- “Mexico has its greatest deficit in history in its petroleum commercial balance, having gone from a surplus of US$15 billion in 2008 to a deficit of US$24 billion this year (2018). This is a result of exports of UX$31 billion of petroleum and oil imports valued at US$55 billion over the same period.”
- “This year we imported 80 percent of the gasoline we consume while our National Refining System, which has six refineries, worked on average to a 38 percent capacity.”
- “The National Refining System has a capacity to process 1.54 billion b/d and also has a refinery in the US due to an alliance with Shell.”
- “PEMEX’s refining capacity can cover 70 percent of national consumption and is ranked 16th in world refining.”
- “Lack of maintenance, investment and various operational deficiencies have lowered usage and yields.”
THE NATIONAL REFINING PLAN
FIRST ACTION: Make Mexico’s Refineries Great Again
The plan foresees a substitution of important equipment, maintenance of internal and peripheral equipment, replacements and substitutions for new equipment with cutting-edge technology as well as an intervention in control and instrumentation systems.
- This includes intervention in dynamic equipment such as: compressors, heat exchangers, heaters, bombs, valves, reactors, regenerators, blowers and central equipment like boilers, turbo-generators and cooling towers.
- Two stages of intervention but only the first was announced: the maintenance of the process train so that by 2019 it will be able to produce at 75 percent of its capacity.
- Change of catalyzer and rehabilitation of Mina 1 plant that will increase cargo by mid-2019.
- With over a year without operations, the first stage will begin in January 2019, and refining train No. 2 will begin operations in November 2019.
- Maintenance of dynamic equipment and increase its processing strategy in the second phase.
- Salina Cruz
- Reconstruction of the crude receiving system and distribution of primary plants. The goal is to reach production of 70 percent its capacity in December 2019.
- Investment in the H-Oil plant, which is currently abandoned. Its rehabilitation is necessary to increase the production of gas and transform vacuum residues.
SECOND ACTION: New Refinery in Dos Bocas
Where: Dos Bocas, Paraiso, Tabasco
“It is the ideal place because that is where the oil ducts converge and because of its proximity to Campeche and Tabasco, where 80 percent of Mexico’s hydrocarbons are extracted. Dos Bocas has the largest storage terminal in the country, existing PEMEX infrastructure and proximity to cargo docks.”
- Capacity: 340,000 b/d
- Quality: 22o API crude
- Processing plants: 17
- Tanks and storage spheres: 93
- Total area: 566ha of federal property
- Cost: US$8 billion
“To interconnect the Dos Bocas Marine Terminal, we will construct a connection to the gas pipeline, expand highway access, connect to the railway, as well as conduct the necessary water infrastructure and telecommunications work.”
How it will be tendered
“The execution of the project will be divided into six construction packages, open to the best firms around the world.” The tender is expected in March 2019.
Finally, AMLO explain that his plan to revamp Mexico’s oil and gas production will be announced in the coming days, during the inauguration of a fast-track drilling program in Ciudad del Carmen.