Antonio Gozain, Argus Media

MEXICO CITY
EnergiesNet.com 03 05 2024

Mexican state-owned oil company Pemex’s refining system could surpass the 1 million b/d volume of crude processed in 2024 for the first time in nine years, as billions of dollars in refinery investments materialize in the last year of Andrés Manuel López Obrador’s presidency.

In January, Pemex’s six domestic refineries processed 954,100 b/d of crude, up 14pc from a year earlier and 16pc higher than in December, according to data from the Energy Secretariat (Sener).

This is the highest monthly crude throughput of Pemex’s refining system since April 2017, when it processed 978,100 b/d, according to the same data.

The increase was the result of a 54pc rise in crude processing at the Salina Cruz refinery – Mexico’s largest – and to a 36pc increase at the Madero refinery, after both refineries underwent maintenance during the fourth quarter of 2023.

“[Pemex] continues to focus on restoring the mechanical integrity of processing plants and storage tanks,” Pemex vice president Reinaldo Wences said on 27 February during the company’s results presentation.

Mexico’s national refining system has the capacity to process 1.627 million b/d of crude, according to Pemex.

But the last time Pemex processed at least 1 million b/d in a full year was in 2015 (see chart), shortly after the 2014 reform went into effect, which opened the country’s energy sector to private and foreign investment, previously under monopoly by Pemex.

But this changed with the arrival of nationalist President López Obrador, with significant investments to rehabilitate Pemex’s refining system.

Since 2019, Mexico has invested more than $29 billion in the construction of the new 340,000 b/d capacity Olmeca refinery, maintenance of its domestic refineries and the construction of two cokers. In addition to the completion of the purchase of 50pc of the Deer Park refinery with a capacity of 312,500 b/d in Texas, according to Sener data.

Mexico could exceed crude processing of 1 million b/d this year for the first time since 2015, but will require Pemex to start commercial operations at the long-delayed Olmeca refinery.

The new refinery is expected to process 242,000 b/d of crude this year, Pemex CEO Octavio Romero said in January. But February has ended and the refinery has yet to start operations.

Self-sufficiency, still a distant reality

Mexico produced 496,200 b/d of gasoline and diesel in January, 18pc more than the 420,500 b/d of the same month in 2023, according to Sener data.

With an average demand of 1.2mn b/d of gasoline and diesel in Mexico, even with the additional 208,000 b/d of fuels that Olmeca will produce in 2024, according to Pemex estimates, the company would still have to increase production by almost 500,000 b/d to achieve self-sufficiency.

Pemex’s Deer Park refinery would have an estimated fuel production of 242,000 b/d in 2024. However, during 2023, that refinery exported only 7pc of its total production to Mexico.

While coker units, still under construction, at the Tula and Salina Cruz refineries would add 162,000 b/d of fuel production by 2026, according to Pemex.

Pemex’s ultimate promise of self-sufficiency would be reached in 2026 if the company achieves its goal of having a revamped refining system operating at full capacity.

Translated by Elio Ohep, Editor EnergiesNet.com

argusmedia.com 03 04 2024