Pemex aims to cut gasoline imports to 34% by 2016 - CEO

Tuesday, July 26, 2011

Mexico's state oil company Pemex aims to cut gasoline imports to 34% of sales by 2016, CEO Juan José Suárez Coppel said Tuesday.

Gasoline sales in 1H11 were nearly 800,000b/d, flat year-on-year, but imports comprised 50.0% of the total, up from 43.9%, according to energy ministry Sener statistics.

Suárez spoke at the inauguration of the US$3.56bn reconfiguration of the Minatitlán refinery in Veracruz state, which forms part of the company's strategy to cut imports. The company will also reconfigure its Salamanca refinery in Guanajuato state, and build a new refinery in Tula, Hidalgo state.

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Minatitlán's reconfiguration upped capacity to some 246,000b/d from its prior 135,000b/d level. The proportion of heavy crude managed by the refinery will jump to 71% of the total, as opposed to 33% previously, Pemex said in a statement.

The reconfiguration more than doubled the refinery's gasoline output to 93,000b/d from 45,000b/d, increased diesel output, lowered fuel oil production, and reduced contaminants in diesel and gasoline from some 500 parts per million (500ppm) to less than 15ppm, Mexico's President Felipe Calderón said at the event.

Works entailed 12 processing plants, a 30-inch oil pipeline, 12-inch gas pipeline and 10-inch hydrogen pipeline.

Pemex has six refineries in Mexico with combined refining capacity of roughly 1.54Mb/d, and a JV with Anglo-Dutch oil major Shell (NYSE: RDS) at the Deer Park refinery in Texas. The refinery was modified in 1995 to process heavy Mexican crude and expanded in 2001.

Pemex is evaluating other potential refining opportunities in the US. Suárez said that, including alliances outside Mexico, Pemex will supply 80% of Mexico's gasoline demand by 2016.

Gasoline demand is expected to grow at an annual 4.5% rate through that year.

Pemex broke the Minatitlán reconfiguration into six tender packages, each of which was administered by separate firms. The project was supposed to have been finished during former president Vicente Fox's administration and repeatedly ran over budget.