Mexico works on plan to add coker to Salina Cruz

Mexico's government is readying a plan to add a coker to the 330,000 b/d Salina Cruz refinery in Oaxaca state on the west coast to help boost production of higher-value refined products.

The addition would support President Andres Manuel Lopez Obrador's goal of making Mexico self-sufficient in refined products.

Revenue from higher prices for Mexico's crude exports would pay for the expansion, as Mexico has held back on its plan to cut crude exports entirely by 2023, the president said. The government provided no detail on costs, but a long-delayed plan to add a coker at the 315,000 b/d Tula refinery — now by the end of 2023 — has a budget of $3bn.

Unnamed companies working on Mexico's new 340,000 b/d Olmeca refinery in Dos Bocas, Tabasco, have already expressed interest in the Salina Cruz coker project to Mexico's energy ministry (Sener), one source told Argus.

Construction firms Samsung, ICA Fluor and Technip are the main construction companies working in the Olmeca refinery, after US construction firm KBR left the project in the early stages because of soaring costs.

The viability of the Salina Cruz coker project also depends on how long it will take to build as the president wants to leave no unfinished projects when he leaves office in December 2024.

Of state-owned Pemex's six domestic refineries, only three — the 285,000 b/d Minatitlan, 275,000 b/d Cadereyta, and 190,000 b/d Madero — have coker units that convert residual fuel oil into higher value distillates such as gasoline and diesel. The Tula coker would also process fuel oil from the neighboring 285,000 b/d Salamanca refinery.

With $8bn earmarked for the Olmeca refinery — and other budget estimates closer to $12bn — $3bn for the Tula coker and $3bn for the Salina Cruz coker, and $1.5bn in combined debt and direct cash payments to purchase the 340,000 b/d Deer Park refinery in Texas, Mexico's government would invest $15.5bn in refineries during the Lopez Obrador administration.

By Sergio Meana