The Olmeca refinery that the Lopez Obrador administration has touted as a major milestone in ensuring Mexico's fuel security has been delayed once again.
First scheduled to start operation in mid-2022, the refinery launch was originally postponed until December 2022, then delayed again until this July. Now, according to an internal document, the July start date has become unfeasible, Reuters has reported.
The Olmeca refinery, also known as Dos Bocas, was planned to add some 20% to Mexico's current refining capacity by being able to process 340,000 barrels of crude daily. The project was aimed at reducing Mexico's dependence on refined fuel imports from its northern neighbor.
Initially budgeted at $8 billion, the refinery went into significant cost overruns, with the price tag to date standing at some $18 billion and the start date still unclear.
"I don't want to give a date because it would be irresponsible," Energy Minister Rocio Nahle said in mid-2022. "A year is a reasonable amount of time, I'd like to do it sooner," she added. "It is a huge, monumental thing ... everything must be harmonized to obtain the fuel. It will take time."
According to the internal Pemex document that Reuters got access to, the July start say was unfeasible because there were still coking plants being constructed on the site and they were not going to be finished by that month. Coking plants are necessary to process heavy crude from Pemex's field.
When it finally enters into operation and ramps up, the Olmeca refinery should produce some 280,000 barrels daily of gasoline and diesel.
The delays are meanwhile interfering with plans by the Mexican administration to put an end to crude oil exports, which was supposed to happen this year, and refine all the crude that Pemex produces locally, thanks to the additional capacity at Dos Bocas.
By Charles Kennedy for Oilprice.com
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