As Pemex Contracts increasingly go to international and private energy firms, it’s worth taking another look at Mexico’s existing energy infrastructure. Refining capacity remains one of the key areas for investment and recent years have seen some very important moves toward increasing Mexico’s overall capacity. The Mexican government, and Pemex have also signaled an intent to go ahead with cleaner, and low-sulfur fuels and for overall reduced emissions of greenhouse gases.
Over the past year, one of the most important refitting and upgrade projects was at the Salina Cruz refinery on the Pacific coast. In operation since only the 1980s, the plant has produced about 290,000 barrels of Gasoline, middle distillates and fuel oil products per day. Current plans call for a total investment of about ten billion pesos, more than US$600 million, and for extending the current pipeline capacity in the surrounding state of Oaxaca. This project is also to include 22 tugboats to better serve the port of Salina Cruz with towing, maintenance and emergency operations.
The refinery upgrades are Pemex’s plans for more diesel fuel production which is part of an investment of US$2.8 billion at Salina Cruz and four other refineries. The fuel quality portion of the upgrade is intended to lower Mexico’s greenhouse gas emissions by some twelve thousand tons per year while increasing refined fuel output by 139,000 barrels per day across Mexico. The refinery upgrade includes work on four diesel hydro desulfurization units, hydrogen production units and sulfur recovery. Upgrades are being made at the plant’s main facility and at several offsite locations. The Mexican firm, Arendal, was contracted for engineering much of these upgrades, for construction of the water treatment plant, sulfur recovery units and for the hydrogen production plant. They’re also remodeling the intermediate distillation hydro desulfurization unit.
Natural gas is used in the Oaxaca plant to power boilers and burners used in the refining process. The 247 km, twelve inch pipeline came online this past January and connects from the Gulf Coast state of Veracruz at Jaltipan.
Salina Cruz is still Pemex’s biggest refinery operations and the entire rehabilitation will increase production by about 30,000 barrels per day when work on the project finishes in about two more years.
Energy reforms in Mexico has sought to free Pemex from 100% dependence on the Mexican government for investment. The resulting industry is more flexible and responsive and economically efficient.
Pemex is still seeking outside investors for work on the coking capacity at Salina Cruz as well as at refineries in Tula and Salamanca, though details have yet to be released. This is in part because, as with just about everything that has happened since major energy reforms were announced in 2013 and 2014, working partnership schemes are still being drawn up. The coking facilities are another part of the overall mission to produce more and cleaner fuels with fewer emissions.
Even with recent halting stops to refinery investment due to budgetary concerns on the part of the Mexican government, Salina Cruz remains a key part of the Energy Reform process.