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President to Inaugurate Dos Bocas Refinery in July

By María José Goytia | Mon, 06/27/2022 - 09:53

On July 1, 2022, the Dos Bocas Refinery will become the second major infrastructure project of President López Obrador to be inaugurated. The chosen date for its inauguration is significant, as it celebrates the fourth anniversary of López Obrador’s electoral triumph.

The Ministry of Energy (SENER), the entity in charge of the project, has stated that the refinery is already in its final construction stage. During this June, the installation of all the equipment will be completed.

The government's original promise was to inaugurate the new refinery in 2022. The date of the official ceremony was set July 1, the date on which, López Obrador won the presidency in 2018. Dos Bocas is also located in the president's home state, Tabasco. However, the inauguration ceremony does not mean that the Olmeca Refinery will start production. In May, President López Obrador clarified that the inauguration date will see the start of the first stage of tests, before its promised refining capacity can be achieved in 2023.

"A testing process will begin at the Dos Bocas refinery, just as a testing period began when they built the last refinery, in Salina Cruz, Oaxaca, a little over 40 years ago. It took about six or eight months for Salina Cruz to start producing optimally,” the president said.  

However, according to SENER's work program, the Dos Bocas facilities will still not be finished by the opening day. In July, the energy ministry planned for the installation of wiring, piping, a gas pipeline and further equipment.

Jorge Andrés Castañeda, Founder, Kairos Analytics, explained to W Radio that the opening of Dos Bocas "will be limited to offices only," since even if all the facilities were ready, the auxiliary infrastructure that would convert crude into refined fuel is still absent. Therefore, it would not be until 2023 that production could truly  begin. It is estimated that when working at full capacity, the Olmeca Refinery will be able to produce 340Mb/d.

When the project was announced, it was estimated that Dos Bocas would require US$8 billion to build and that it would be ready in three years. Currently, spending has risen to 75 percent over the initial budget. Even with work still pending, the cost of the Olmeca Refinery already cost more than US$14.5 billion.

In addition to the construction of the Dos Bocas and the acquisition of the Deer Park in Texas, the López Obrador administration has earmarked MX$37 billion (US$1.85 billion) for the rehabilitation of Mexico’s other six operational refineries.

The president also announced that the construction of another coker plant is in the cards. "Our plan is to finish the Tula coker by the end of 2023. This week, we resolve if we start the construction of another coker in Salina Cruz to process fuel oil into gasoline. This way, we will obtain higher profits: since gasoline has a steeper price than fuel oil, we will stop polluting with fuel oil and we will squeeze more out of crude oil to achieve the goal of self-sufficiency."

Since the beginning of his administration, López Obrador has allocated significant resources to oil infrastructure, in an attempt to "rescue" state oil company PEMEX. The president is pursuing a main goal: to achieve Mexico's energy self-sufficiency. "The purpose is to not buy gasoline abroad. The lesson for the youth is to achieve energy self-sufficiency and food self-sufficiency by producing what we consume in Mexico," said the president.

The data used in this article was sourced from:  
Expansión, El Universal, Mexico Business News
María José Goytia María José Goytia Journalist and Industry Analyst