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Mexico’s $8B Refinery Could Have ‘Severe’ Impact On Air Quality

Mexico’s planned US$8-billion oil refinery in the home state of President Andrés Manuel López Obrador would have a ‘severe’ impact on air quality in the area, Reuters reported on Thursday, citing an unredacted version of the environmental impact assessment that state oil firm Pemex has made.

Pemex will be the company to work on the refinery project, a key campaign pledge of leftist President López Obrador who promised to reduce Mexico’s reliance on fuel and refined product imports, most of which come from the United States.

The publicly available version of the environmental impact assessment is overall positive, according to Reuters. Many environmental impacts of the planned refinery would be ‘moderate’, but there would be a ‘severe’ impact on air quality in the area in Dos Bocas, in López Obrador’s home state of Tabasco, according to the assessment that Reuters has reviewed.   

Last month, Mexico scrapped plans to tender the construction of the refinery to foreign companies, saying that it would be Pemex that would oversee the project. According to López Obrador, the foreign firms would be unable to meet the government deadline to have the project ready by 2022 and weren’t happy with the US$8-billion price tag.

“The company has secured the financial, technical, human and material resources necessary to complete the project,” Pemex said in a statement in May. According to Pemex and López Obrador, the entire project will cost US$8.35 billion (160 billion Mexican pesos) and will create 100,000 jobs. Construction is expected to conclude in May 2022.

Analysts, however, doubt that Mexico could complete the project on time and on budget, which could put additional strain on the already stretched finances of the government and Pemex.

According to Moody’s, the project is expected to exceed the planned budget—in a big way—because of Mexico’s “limited know-how” in such large-scale ventures.

By Tsvetana Paraskova for Oilprice.com

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