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News Article

Dos Bocas Construction Update

By Conal Quinn | Wed, 06/01/2022 - 16:50

The Ministry of Energy (SENER) released a video this week detailing the progress made at the construction of the Olmeca refinery at Dos Bocas, a month away from its July 2, 2022 inauguration date. In the video, Minister of Energy Rocío Nahle lists the site laboratory as one key part of the construction the ministry expects to conclude in the coming days.

“Here I am in the refinery's laboratory, which is made up of four modules. This is a building we must complete by next week but we are already putting the finishing touches on,” said the head of SENER. 

Nahle also highlighted the assembly of the coke drum structure, which rises to an imposing height of 127m from ground level, as a major development in the refinery's construction. A geodesic dome was also installed at the bitter water treatment plant since the last video update, weighing more than 8 tons. Nahle added that progress is being made in the construction of bulkheads for the storage area as well as in the equipment for the 39 electric substations. 

Moreover, Nahle pointed out that in the processing area the installation of chimneys of the naphtha hydrotreating stations is continuing while in the catalytic plant, the FA-21 101 equipment has been assembled and unit 9 of the overhead burner of the exhaust system was installed. As for integration networks, progress is also being made laying pipelines connecting Dos Bocas to the headquarters of the National Center for National Natural Gas Control (CENAGAS), which will supply natural gas to the refinery.  

In general, Dos Bocas’ construction had been making steady progress as the federal government worked in unison with Guadalupe Philips' Icafluor, Paolo Rocca's Techint, the Asian giant Samsung and Daniel Flores' Proyecta. That was until five months ago, when contractors complained that they had not been paid and therefore were unable to obtain new resources. The debt owed to construction companies is estimated to be around MX$23 billion (US$1.17 billion). It was also reported in El Universal this week that President López Obrador had to intervene as Nahle and PEMEX CEO, Octavio Romero, began to clash heads over the soaring budgets.  

By April 2022, SENER had already used up 99.5 percent of the assigned budget of US$9.8 billion and were forced to request additional resources. The budget had already been amended before from the US$8 billion allocated at the beginning of the current administration. In recent weeks, a figure of US$12.5 billion had been leaked by international financial circles, while Bloomberg reported that the total cost of Dos Bocas could still reach as much as US$14.5 billion. Meanwhile, Nahle was forced to deny claims that such financial challenges would result in SENER missing its deadline, or that the ministry would be forced to cut back and make the refinery smaller than initially planned. 

The Olmeca refinery is a signature project of López Obrador’s government, together with the Mayan Train, as well as an integral part of the administration’s economic promise to change the fortune of Mexico’s NOC with the added capacity to refine 340Mb/d.

The data used in this article was sourced from:  
Aristegui Noticias, Oil and Gas Magazine, Milenio, Reporte Indigo, Razon
Conal Quinn Conal Quinn Journalist & Industry Analyst