Pemex study finds more refineries, pipelines needed

Eric Watkins
Senior Correspondent

LOS ANGELES, Aug. 6 -- Mexico's Petroleos Mexicanos, in a study released to the country's Congress, has underscored the need for additional refining resources or, lacking them, additional pipelines within the country.

Pemex said construction of a 300,000 b/d refinery in Tula in Hidalgo state would provide the greatest net present value. In addition to the $8.17 billion cost of the refinery itself, investment in associated infrastructure would be $852 million.

The proposed refinery also would require construction of a new $769 million oil pipeline from Nuevo Teapa to the Chicontepec region, while a further $64 million would extend to a new multipurpose pipeline to eliminate bottlenecks.

The study suggested other possible locations for a refinery, including a 300,000 b/d facility in Tuxpan, in Veracruz state, which is supplied at the moment by refineries in Tula and Salamanca with some support from the Salina Cruz refinery.

The Pemex study considered other sites for a new refinery, including Campeche in Campeche state; Manzanillo in Colima state; Lazaro Cardenas in Michoacan state; Cadereyta in Nuevo Leon state; Salina Cruz in Oaxaca state; Dos Bocas in Tabasco state; and Minatitlan in Veracruz state.

Absent a new refinery, the Pemex report said, Mexico will need to invest some $1.61 billion in central and western Mexico for a number of new pipelines to complement existing distribution systems.

The suggested lines include: a 310 km, 24-in. pipeline from Tuxpan in Veracruz state to Tula in Hidalgo state; 327 km of 18-in. from Tuxpan to Puebla to Valle de Mexico; 241 km from Tula to Salamanca, Guanajuato state; 225 km from Tula to Toluca in Mexico state; 65 km of 8-in. from Tula to Pachuca, Hidalgo state; 99 km from Valle de Mexico to Cuernavaca; 236 km from Salamanca to Guadalajara; 234 km from Salamanca to Aguacalientes to Zacatecas; and 94 km from Salamanca to Leon in Leon state.

The Pemex study said the majority of these projects should be constructed, but that "some could be modified depending on the sites chosen for the construction of additional refining capacity."

Contact Eric Watkins at hippalus@yahoo.com.

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