MMEX Resources moves forward with proposed Texas refinery

March 3, 2020
MMEX Resources Corp. is advancing development of the first phase of its proposed Pecos County, Tex., refinery near the Sulfur Junction spur of the Texas Pacifico railroad, about 20 miles northeast of Fort Stockton

MMEX Resources Corp.—a development-stage company focusing on acquisition, development, and financing of oil, gas, refining, and infrastructure projects in Texas and South America—is advancing development of the first phase of its proposed Pecos County, Tex., refinery near the Sulfur Junction spur of the Texas Pacifico railroad, about 20 miles northeast of Fort Stockton (OGJ, Dec. 4, 2017, p. 22).

VFuels LLC, Houston, has started detailed design and engineering (DED) for the refinery’s Phase 1 crude distillation unit (CDU), which will have a processing capacity of 10,000 b/d, the service provider said.

As part of the project, VFuels is executing DED for the inside battery limits (ISBL) portion of the project, which will reduce the overall project schedule by at least 60 days and allow VFuels to begin fabrication immediately on the ISBL portion of the project.

Startup of DED on the project follows MMEX’s previous agreements with VFuels—an oil and gas engineering firm that specializes in modular refinery process equipment—under which VFuels was to supply specialty equipment as well as oversee engineering, design, and construction of the project.

Under the existing equipment supply and engineering, procurement, and construction (EPC) agreements with MMEX and its special purpose company, Pecos Refining & Transport LLC, VFuels will now oversee engineering, design, and construction of the CDU ISBL.

Saulsbury Industries Inc., Odessa, Tex., will serve as overall EPC partner for engineering and construction of the outside battery limits (OSBL) portion of the project, VFuels said.

Project status

MMEX—which received approval from Pecos County for the project’s water production permit in January—previously selected debt and equity sources for $340 million in potential financing to proceed with the proposed refinery and related terminals, according to a series of news posts to the company’s website.

The operator also has entered into two offtake agreements with unidentified firms to market the proposed project’s refined products, including diesel, naphtha, and residual fuel oil meeting the International Maritime Organization’s 2020 regulations requiring ships to use marine fuels with a sulfur content below 0.5%, according to a May 30, 2019, release from MMEX.

While Phase 2 of the project previously was to include a full-scale crude oil refinery with capacity of up to 100,000 b/d that will produce a full slate of refined products, Jack W. Hanks—MMEX’s president and chief executive officer—said on Sept. 17, 2019, that the company expected to be processing about 20,000 b/d of crude oil at the refinery’s Phase 1 and Phase 2 CDUs (OGJ Online, Oct. 22, 2018).

A revised, definitive timeline for completion of either phases of the delayed development, however, has yet to be released.