/
Analysis

Minatitlán Refinery Upgrade

Tue, 01/22/2013 - 13:33

Located in the municipality of Minatitlán in the state of Veracruz, the General Lázaro Cárdenas refi nery was built in 1906 as the fi rst refi ning facility in Latin America. As the Mexican oil and gas industry developed, the facility at Minatitlán eventually came to be one of Pemex’s smaller refi neries, dwarfed by newer infrastructure, only able to process 175,000 b/d of crude oil. With a growing ine· ciency at Pemex’s refi neries, the growth of domestic consumption and the consequent need to import Mexico’s gasoline and diesel, coupled with the sulfur reduction requirements that were established for Mexican fuel, the Lázaro Cárdenas refinery became a prime candidate for reconfi guration.

After its creation, the Minatitlán refi nery started operations under the management of the Mexican oil company El Águila. In 1938, the refi nery’s facilities became national property under the expropriation decree. In 1954, the plant underwent Pemex’s fi rst refi nery modernization e† orts, with a reconfi guration that added new production units with higher processing capacity. The result was a refi nery with 24 plants for processing crude oil, destined to process the crude exploited in the Mexican oil boom that took place from 1970 to 1996.

By that time, the National Refining System (SNR) had become ine· cient by global standards, with commonplace delays on maintenance and equipment upgrades. The lack of adequate infrastructure to supply the country with gasoline, diesel and other refined products was a direct consequence of Pemex Refi ning’s limited investment budget. Pushed by environmental and modernization requirements, Pemex decided to begin the reconfiguration of the entire national refining system, including the Madero, Tula, Salamanca, Salina Cruz, and Minatitlán refineries.

By 2003, the Minatitlán refi nery had 27 industrial plants dedicated to the production of refi ned products. Its 800-hectare extension housed facilities capable of processing 185,000 b/d of crude oil and 30,000 b/d of butane-mixed liquids. Its additional plants, located in Cangrejera Veracruz, give the refi nery an extra Maya crude processing capacity of 170,000 b/d. This enabled the Minatitlán refi nery to cover most of the demand for refi ned product in the southeast of the country.

With the objective of lowering gasoline imports by 6% between 2012 and 2016, Pemex planned a reconfi guration of the refi nery’s facilities that sought to expand its installed capacity to 285,000 b/d. This would be done by adding 57,000 b/d of incremental gasoline supply and 36,000 b/d of incremental distillate supply. The project required an investment of US$3.56 billion for the construction of 12 new processing and integration plants, auxiliary services, water treatment, as well as an oil line and a gas line.

Five EPC contracts were tendered, as well as one for the construction of a pipeline to transport the fi nished product from Cangrejera to Minatitlán. The Mexican Petroleum Institute (IMP)’s participation in the project began at its conception in 1996, when Pemex requested the institute’s assistance to verify the structures chosen for the reconfi guration of the SNR. With help from the SINCI (Síntesis de Complejos Industriales) software, the institute detected certain ine· ciencies in the original plan for the reconfi guration: plants needed for the manufacturing of cleaner petrochemicals had not been considered. The IMP delivered the results of the geotechnical surveys conducted at the site and the engineering plans for its conditioning and access road. Once the analysis was complete and the reconfi guration project was fi ne-tuned, it was assigned to KBC, which only changed the plants’ planned capacity and enlarged the water treatment units from the original proposals of the IMP.

After some changes to the proposed timelines, the reconfi guration was fi nished by the end of July 2011, when President Felipe Calderón reopened the plant in an o· cial event, saying at the ceremony: “More than a reconfi guration, this is truly a new refi nery for Pemex.” The upgrade gave the plant an increased capacity of 100,000 additional b/d from the original 185,000 b/d, and its optimal crude processing bulk improved from 175,000 b/d to 246,000 b/d. This 40% increase in processing volume was largely driven by the upgraded infrastructure’s capability to process the heavy oil that Pemex now increasingly produces: from a processing capacity that was only 33.1% focused on refi ning Mexico’s Maya heavy crude oil blend, today 71% of capacity is dedicated to this heavy crude blend.

Gasoline and diesel production went up as a result of the reconfi guration. While the refi nery used to only produce 45,500 b/d of Magna gasoline, the reconfi guration increased Magna output by 31,900 b/d and allowed the production of 15,400 b/d of Premium gasoline, in line with Pemex Refi ning’s established environmental regulations. While Magna contains 300ppm of sulfur, Premium only has 10% of that level, resulting in a safer, less harmful fuel. The refi nery also saw a boost in its processed diesel volume, upping its production capacity from 45,000 b/d of turbosine to 51,800 b/d, while adding an extra 30,000 b/d of ultra-low-sulfur diesel (UBA). Finally, to make up for the decrease in fuel oil demand, capacity was lowered from 65,000 b/d to 23,700 b/d.

All of the reconfi guration processes that Pemex has performed at Minatitlán are aimed at restoring the commercial balance for petroleum-derived products and reducing the high gasoline and diesel import levels. Through the collaboration of the IMP, along with highly experienced companies such as ICA Fluor, Telvent, Inelectra, Samsung Engineering, Emerson, Honeywell, and Dragados, Pemex Refi ning has been able to modernize, expand, and increase the e· ciency of the Lázaro Cárdenas refi nery. The upgrade has transformed Minatitlán into one of the most up-todate refi neries in Latin America despite being the oldest in the region. The project also represented an important economic boost for the region, increasing employment in southern Veracruz: the reconfi guration project generated 7,000 direct jobs, while an additional 500 permanent jobs were created to manage the plant’s new facilities.

In January 2013, Pemex restarted operations of the second fl uid catalytic cracking unit and the sulfur recovery plant.