Pemex increases refining output 4% in 2023 at its six operating plants from year ago; Analyst sees new Dos Bocas refinery in commercial operations by 2024

Reinaldo Wences, executive vice president of Pemex Transformacion Industrial, or the Mexican state oil company´s crude oil processing area, said during the second quarter (April-June) earnings discussion call held on July 28, 2023, that the crude oil runs at the national refining system averaged 826,000 barrels per day, a 4% increase when compared with the same period of the previous year.

Image shows new Tabasco state refinery. In front the second from the left is Pemex director Octavio Romero. In the center, on the left is Secretary of Energy Rocio Nahle and Mex. Pdt. Andres M. Lopez Obrador. Image courtesy of Pemex

During all of 2022 Pemex refined on average 816,000 bpd of crude at its six plants, and this had been a 15% increase compared with the 712,000 bpd refined in 2021, Wences had said during the first quarter earnings call held on Feb. 27, 2023.

"By refinery, the process was as follows -- in Salina Cruz, 193,000 barrels per day; in Tula, the process was 175,000 barrels per day; Minatitlan with 128,000 barrels per day; Cadereyta with 123,000 barrels per day; Salamanca with 115,000 barrels per day; and Madero with 91,000 barrels per day,” Wences said, according to information available on the website of Pemex.

The company had said in mid-2022 that after having focused efforts on construction of the yet-to-be-started-up Dos Bocas refinery in the state of Tabasco, it was going to work on improving its existing plants.

The company did not provide any new timeline for the startup of the Dos Bocas refinery in the state of Tabasco, southeast of Mexico. Officials had in the past anticipated a startup by July 2023.

An independent research group estimated recently that it may take the company until 2024 to put the refinery into operation. The last estimated startup date was July 2023 but there was not an announcement in the month to confirm any startup.

Works to improve refining capacity

Mexican President Andres Manuel Lopez Obrador, elected for a six-year term in 2018, made one of the priorities of his government to improve the fuel production capacity at Pemex to reduce costly imports. The three main roads taken by Mexico´s Lopez Obrador to help Pemex quickly raise capacity included the purchase of the 340,000 bpd Deer Park refinery in Texas from Shell, the construction of Dos Bocas, and also works to repair and upgrade its existing plants.

“Regarding the national refining system rehabilitation program, during the January-June period, repairs were completed in 23 processing units, 19 corresponding to the 2023 program, and four from previous years programs,” he said.

Pemex said that in the second quarter of 2023, “oil Products production recorded a 2% increase as compared to the same quarter of 2022, averaging 822,000 barrels per day, of which 247,000 barrels per day were gasoline; 137,000 barrels per day of diesel; 35,000 barrels per day of jet fuel; and 403,000 barrels per day of other oil products and LP gas."

Petrochemical production declines

Total petrochemicals production in the second quarter of 2023 was 211,000 tons. “The reduction in production is mainly explained by lower ammonia production,” the company said. Ammonia has several important uses including to produce fertilizers.

This was a result of “the scheduled shutdown for repairs at the ammonia VI plant of the Cosoleacaque Petrochemical Complex, which began in April 2023 and affected production in the second quarter, mainly in the production of ammonia, which was 17,000 tons, with a reduction of 79,000 tons compared to the same period of 2022,” the company said. The re-start is planned for August, it said.

The aromatics and derivatives production was 28,000 tons, 26,000 tons higher than the figure recorded in the second quarter of 2022 “as a result of the continuous and stable operation of the CCR unit at the La Cangrejera Petrochemical Complex,” the company said.

The ethane derivatives production was 29,000 tons, 13,000 tons higher than the recorded in the same period of 2022, “mainly explained by a higher linear, low-density polyethylene production,” it added

The company is adding in Salina Cruz capacity to process 75,000 bpd of residuals into diesel or gasoline. There are plans to add some additional 100,000 bpd of residuals processing capacity combining works in Tula and Salamanca, the company said.

“Considering the contribution of Deer Park, the total average amounts 1.1 million barrels processed within Pemex,” said also on July 28, 2023 the company´s CEO Carlos Cortez Gonzales.

Research group IIR: Dos Bocas refinery may not start until 2024

According to research by a group named Industrial Info Resources, the refinery will not likely see a restart until at least late 2023 or even into 2024.

“According to the IIR Energy Alert, Pemex is starting up auxiliary services at the refinery, and once that is complete, the company will start up processing units,” it said in a release published on June 9.

"When the refinery is fully operational it will not only help reduce refined product imports but also decrease the amount of sour crude available for export. The Olmeca refinery will consume Maya crude, decreasing the volumes available to export to the U.S., (...)" said Hillary Stevenson, a director specialized in enery at IIR, according to the press release.

According to a report by Forbes on June 28, 2022,  Mexico´s Energy Administration (known as Sener for the acronym of Secretaria de Energia), headed by Rocio Nahle, had projected at the time a startup in sequences with 240,000 bpd of output in the first year likely increasing to 267,000 bpd in 2025 and 340,000 bpd by 2026.

The news report was published at the time Lopez Obrador held a ceremony to mark the end of construction of the refinery.

Pemex officials have said that they aim for self sufficiency in gasoline production in 2024.

By Renzo Pipoli