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Pemex to invest USD2.6 billion at Tula refinery to reduce its dependence on imported fuel

May 26/2021

MOSCOW (MRC) -- Mexico's Pemex will invest USD2.64 billion to complete a coking plant at its Tula refinery as the country seeks to reduce its dependence on imported fuels, reported S&P Global with reference to the state company's CEO's statement.

The project, which Pemex expects to finish by 2023, will allow Pemex to process 90% of the fuel oil produced at Tula and at neighboring Salamanca, Octavio Romero Oropeza said during the daily press conference held by Mexican President Manuel Andres Lopez Obrador.

Mexico currently has six refineries with a combined nominal capacity to process 1.6 million b/d, three of which have a coking plant. However, during the last decade they have been running at a fraction of their capacity, processing less than 600,000 b/d in 2020 on average, as two of the refineries were built over a century ago.

Under Lopez Obrador, Pemex has recently increased its gasoline output to close to 300,000 b/d, a figure not seen in the last four years, data from the Energy Secretariat shows. Lopez Obrador has promised the country will stop importing fuels when his term finishes in 2024. In April, Mexico imported little under 500,000 b/d of gasoline and almost 300,000 b/d of diesel, slightly below the average of the last five years, data from the secretariat, or SENER, shows.

"When the coking plant is ready, it will process 140,000 b/d of fuel oil to generate 42,000 b/d of gasoline; 78,000 b/d of diesel and 20,000 b/d of fuel oil," Romero Oropeza said.

Romero Oropeza mentioned that the investment is part of a broader scheme to restore the strength of the state oil company after it was neglected for years under past administrations.

The previous administrations managed to sell three important hydrogen plants inside the refineries of Tula, Madero and Cadereyta, although they are essential for the operation, Romero Oropeza said. The current administration managed to cancel the sale of Cadereyta, Romero Oropeza said, but Pemex continues to pay high sums for the lease of those facilities, he said.

"The Tula plant was sold for little over $50 million in 2017, but by the end of 2020, Pemex had paid the new owners over USD49 million in lease fees," Romero Oropeza said, adding that the contract extends for another 15 years.

To avoid those excessive costs, the government is now in negotiations to buy back the other two plants, he said.

As MRC informed before, earlier this month, a major fire broke out at an oil refinery run by Petroleos Mexicanos (Pemex) in the eastern city of Minatitlan in the southern state of Veracruz. The blaze started at this refinery, one of six operated by Pemex, which has a capacity of up to 285,000 barrels per day, on Wednesday afternoon, 7 April.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC"s ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, LDPE, HDPE, ethylene, petrochemistry, Pemex Petrochemicals, Mexico, Russia.
Category:General News
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