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Pemex faces dilemma over calls for new refineries in Mexico
Platts
Mexico City
Petroleumworld.com 09 29 06
Fast-rising gasoline imports are boosting calls for state Pemex to build
new refineries in Mexico to cope with demand.
Since 2003, Mexican crude production has held steady at just under 3.4
million b/d and exports at about 1.85 million b/d. Meanwhile, gasoline imports
have have shot up from 54,500 b/d in 2003 to 215,600 b/d so far this year in
tandem with a rise in consumption from 600,000 b/d to 709,000 b/d.
And, thanks to the longest period of economic stability in modern times,
consumer credit is now generally available, sparking a boom in automobile
sales that seems sure to keep gasoline sales climbing.
Almost 12 years ago, Pemex set out to reconfigure its six refineries but
the program is still far from complete. The refineries at Cadereyta and Ciudad
Madero in northern Mexico were reconfigured, and a reconfiguration is underway
at Minatitlan on the southern Gulf. But Tula and Salamanca in the center of
the country were given only relatively minor upgrades. Still pending is Salina
Cruz on the southern Pacific, Mexico's largest refinery with a 300,000 b/d
capacity.
President-elect Felipe Calderon, who takes office December 1, has pledged
to change the laws that insist that all Mexican refineries must be wholly
owned by Pemex. Pemex has a joint venture with Shell in the Deer Park refinery
near Houston that processes heavy Maya crude which is sent back as products to
Mexico. "If we can have joint ventures in the US, why not in Mexico?" he said
while on the campaign trail.CALL FOR UPGRADES OF EXISTING PLANTS
The first priority of the incoming administration should be to complete
the updates of the existing refineries, says Mexico City-based analyst David
Shields. "Given the level of underinvestment it's a bit of a miracle that they
still meet 65% of demand," he adds.Energy Secretary Fernando Canales recently said that the current Pemex
administration would leave for its successors the basic engineering for two
possible new refineries, one an extension of Salina Cruz, the other at Tuxpan
on the Gulf.Meanwhile, the government is committed to providing up to 230,000 b/d of
Maya crude for a new refinery to be built in Central America. Much of the
resulting gasoline and other products will be sold back to Mexico.
Calderon, who once opposed the Central American project, now says he
accepts it, given the inevitable delays in winning support for private
investment in refining in Mexico.
For Shields the Central American venture is another example of the
"incoherence" of Mexican petroleum policy. With crude production having
reached a plateau, or perhaps even a decline in future, "there's no two ways
about it," he says. Any increase in refining capacity that could bring Mexico
close to self-sufficiency will inevitably lead to a drop in crude exports "and
nobody seems prepared to admit that."For similar stories, take a trial to Platts Oilgram News at
http://www.platts.com/Request%20More%20Information/
Platts 28 09 06
Copyright ©2006 Platts. All Rights Reserved.
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