Pemex's Olmeca Refinery to Begin Crude Oil Processing by Mid-Year

Mexico's state-owned energy giant Pemex has announced that its new Olmeca refinery, located in the port of Dos Bocas, Tabasco, will commence crude oil processing in the second half of this year. Pemex CEO Octavio Romero disclosed that the refinery, also known as the Dos Bocas refinery, is expected to significantly enhance the company's domestic processing capabilities, with a target to process 163,000 barrels per day (bpd) by the year's end. This forms part of a broader strategy to increase Pemex's overall refining capacity to 1.44 million bpd.

The Olmeca refinery, which has faced multiple delays and cost overruns since its construction began in 2019, is a cornerstone of President Andres Manuel Lopez Obrador's energy policy. Initially budgeted at $8 billion, the project's costs have more than doubled, surpassing $16 billion. Despite these challenges, the refinery is projected to eventually reach its full processing capacity of 340,000 bpd by 2025.

Pemex's ambitious plans for the Olmeca refinery are seen as a critical step toward reducing Mexico's dependency on imported fuels. The refinery is expected to produce a significant portion of its output in diesel, gasoline, and jet fuel. By September, just before President Obrador leaves office, the refinery aims to ramp up its production to 274,000 bpd, marking a significant milestone in Mexico's energy independence efforts.

This expansion is part of Pemex's larger goal to boost its total petroleum liquids production, which averaged 1.88 million bpd last year. Additionally, the company's proven oil reserves are projected to remain stable at 7.4 billion barrels of oil equivalent in 2024. The gradual increase in processing capacity at the Olmeca refinery is anticipated to provide substantial economic benefits, supporting the local economy and solidifying Mexico's position in the regional energy market.

The initial processing stages at Olmeca have already begun, with Pemex starting to feed 16,300 bpd of crude oil into the facility. This volume is expected to gradually increase as the refinery moves closer to full operational capacity. Despite the initial setbacks, the start of crude processing at the Olmeca refinery represents a significant achievement for Pemex and Mexico's broader energy strategy.

By Julianne Geiger for Oilprice.com

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