Mexico’s largest oil refinery opens to fanfare, not yet operational
By Adriana Barrera
PARAISO, Mexico (Reuters) -Mexican President Andres Manuel Lopez Obrador formally opened a serious new oil refinery on Friday, a signature undertaking for the leftist chief who argues it is going to assist the nation lower a longstanding dependence on international gasoline and diesel provides.
The Olmeca refinery owned and operated by state-run oil firm Pemex is billions of {dollars} over price range and nonetheless below building, however that didn’t cease Lopez Obrador from headlining a splashy inauguration ceremony on the facility constructed simply off the Gulf coast port of Dos Bocas in his dwelling state of Tabasco.
In a speech, Lopez Obrador dismissed critics who argue that fossil fuels ought to not be a part of Mexico’s power future, whereas additionally criticizing previous governments for failing to construct a brand new refinery in almost 4 a long time.
“Throughout all this time, they guess on promoting crude oil after which shopping for gasoline, diesel and different fuels in international lands,” mentioned Lopez Obrador.
However officers have mentioned the Olmeca refinery probably is not going to be prepared to begin producing motor fuels till 2023, as months of testing are needed as soon as building is full.
Lopez Obrador himself just lately conceded the power will find yourself costing between $11 billion-12 billion, not the roughly $8 billion he initially set as its most value.
In April, sources near the undertaking informed Reuters it is going to value no less than $14 billion whereas different studies have put the ultimate price ticket a number of billion {dollars} larger.
Two folks acquainted with the matter just lately informed Reuters the brand new refinery will solely be working close to capability in 2025.
The president, a leftist useful resource nationalist, argues that the refinery can assist wean Mexico off of imported motor fuels, nearly all of which is provided by U.S. refiners, which he says undermines the nation’s sovereignty. He additionally believes the refinery can higher defend Mexican motorists’ wallets from the volatility of the worldwide oil market.
The refinery, with a high crude processing capability of 340,000 barrels per day, will likely be Pemex’s largest as soon as it comes on-line.
In separate remarks previous to the president’s speech, Pemex Chief Government Octavio Romero mentioned the Salina Cruz refinery in Oaxaca, presently Pemex’s greatest, can even be upgraded to incorporate a serious new coking plant, which is required to extra effectively course of heavy crude into higher-value fuels.
At present, solely three of Pemex’s fully-operational home refineries function coking vegetation.
Romero mentioned building firm ICA Fluor has been awarded a turnkey contract for the Salina Cruz coking plant, which he mentioned will come on-line in 12 months.
The Pemex boss didn’t element the extra value wanted for the undertaking, solely that $1.4 billion had already been spent earlier than it was suspended for six years.
(Reporting by Adriana Barrera; Writing by Isabel Woodford and David Alire Garcia; Modifying by Anthony Esposito, Daniel Wallis, Marguerita Choy and David Gregorio)
