Pemex lets contract for Salamanca refinery amid budget cuts

Mexico’s Petroleos Mexicanos (Pemex), through a contractor, has let a contract to SENER Ingeniería y Sistemas SA, Mexico City, a division of SENER Group, Barcelona, for work related to the modernization of the Antonio M. Amor refinery in Salamanca, Guanajuato. The revamp is part of Pemex’s previously announced $2.8 billion investment into increasing ultralow-sulfur diesel (ULSD) production at five of the country’s refineries.

Mexico’s Petroleos Mexicanos (Pemex), through a contractor, has let a contract to SENER Ingeniería y Sistemas SA, Mexico City, a division of SENER Group, Barcelona, for work related to the modernization of the Antonio M. Amor refinery in Salamanca, Guanajuato. The revamp is part of Pemex’s previously announced $2.8 billion investment into increasing ultralow-sulfur diesel (ULSD) production at five of the country’s refineries (OGJ Online, Sept. 15, 2014).

Under the contract, which was awarded by Samsung Engineering Co. Ltd., SENER will provide detailed engineering for modernizing existing units at the refinery, as well as for the integration of those units with associated off-site installations, SENER said.

The contract, for which a value was not disclosed, follows Pemex’s previous award of an $80 million contract to Samsung Engineering for Phase 1 of the ULSD project at the Salamanca plant, which involves design of a 38,000-b/d hydrodesulfurization (HDS) unit as well as the revamping of the refinery’s existing 53,000-b/d HDS unit (OGJ Online, Sept. 17, 2014).

While SENER did not confirm a timeline for its leg of the work at Salamanca, Samsung Engineering previously said initial engineering for Phase 1 of the refinery’s ULSD project is due to be completed in September 2015.

‘Budget adjustments’

A timeframe for Pemex’s program to improve the quality of fuels produced in Mexico, however, may face an overall delay.

On Feb. 13, Pemex’s board of directors approved a plan to slash its 2015 budget by 62 billion pesos ($4 billion) to meet broader government spending cuts amid sharply lower crude oil prices, according to a Feb. 16 press release from Pemex.

As a result, the company said it has deferred spending for a series of downstream activities, which include refinery modernization projects, as well as those geared at improving gasoline and ULSD qualities.

With many of the original contracts for these projects signed under more favorable market conditions, Pemex also plans to renegotiate these contracts, the company said.

The company did not identify which or how many downstream projects would be immediately affected by the budgetary cuts.

In addition to contracts for the Salamanca refinery, Pemex also let fuel quality-related contracts to the following companies:

• Foster Wheeler USA Corp. ($584 million) for the Antonio Dovali Jaime refinery in Salina Cruz, Oaxaca.

• Tecnicas Reunidas ($568 million) for the Lazaro Cardenas refinery near Minatitlan in Veracruz state.

• ICA Flour Daniel ($737 million) for the Francisco I. Madero refinery in Madero, Tamaulipas.

• ACS Group ($560 million) for the Miguel Hidalgo refinery in Tula, Hidalgo (OGJ Online, Oct. 14, 2014).

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