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Mexico’s state oil firm Pemex is expected to start running the long-delayed Dos Bocas oil refinery at full capacity this year, Mexican Energy Minister Rocio Nahle said this week.
The oil refinery has seen delays and cost overruns estimated around or even above $3.6 billion, and it hasn’t started producing usable gasoline yet.
The plant is one of the flagship projects of Mexican President Andrés Manuel López Obrador aimed at weaning the country off fuel imports and having “energy independence”.
Originally, the plan for the refinery in López Obrador’s home state of Tabasco was expected to cost US$8 billion. Even when it was announced, analysts doubted the budgeted costs would be sufficient and were not optimistic about the financial viability of the project.
In the following years, costs for the refinery soared by 40%, to an estimated $12.5 billion.
Analysts had thought that the refinery may not be able to produce any gasoline in 2023 and even in 2024.
Now the government expects it will be working at full capacity this year.
“We've already started producing gasoline,” but it is not usable yet, Nahle was quoted by Reuters as telling local media.
“This year we're going to have the refinery working at 100%,” the minister added.
The Dos Bocas refinery, officially named Olmeca refinery, will have the capacity to process 340,000 barrels per day (bpd) of crude and produce 170,000 bpd of gasoline and 120,000 bpd of diesel, according to Nahle.
First scheduled to start operation in mid-2022, the refinery launch was postponed until December 2022, then delayed again until July 2023. In May, reports emerged that the July start date had also become unfeasible.
The Dos Bocas project, which would add some 20% to Mexico’s current refining capacity, was aimed at reducing Mexico’s dependence on refined fuel imports from the United States.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.