PEMEX's Crude Distillation Unit (CDU) at Deer Park Shuts Down

An enormous crude distillation unit (CDU) complex owned by PEMEX, with the capacity to process 270Mb/d, was shut down on Monday at the Deer Park refinery in Texas following a reported failure, according to sources familiar with the operations.

DU-2 is the largest of two CDUs at Deer Park, with a total of 312.5Mb/d processing capacity. The NOC was trying to determine the cause of the closure to quickly restart the DU-2 unit. This is the second shutdown seen at Deer Park, after malfunctions forced a 70Mb/d fluid catalytic cracker (FCC) to be disconnected on Oct. 4. The NOC had already brought the FCC back online on Oct. 13.

After being acquired by PEMEX in January 2022, the Deer Park refinery has sent less than 10% of its production to Mexico, according to figures reported during President Andrés Manuel López Obrador's Fifth Government Report. According to the document, as of June 2023, the factory located on the outskirts of Houston, Texas, had sent only 14.5MMb of oil products to Mexico.

According to PEMEX's financial statements, the refinery maintained an average production of 316Mb/d of oil products from Jan. 20 to Dec. 31, 2022, resulting in a total of 109.3MMb for the entire year. Throughout the first half of 2023, the refinery's production averaged slightly over 300Mb/d, resulting in a semi-annual production of approximately 55MMb. Between Jan. 20, 2022, and June 30, 2023, the refinery's cumulative production reached just over 164MMb of oil products, with exports to Mexico making up a mere 9% of the total.

Initiatives are underway to establish new logistical routes to enhance the refinery's capacity to meet national demand for products and capitalize on growth opportunities, all in alignment with PEMEX's strategy, as outlined in the presidential report.

Deer Park's acquisition, according to President López Obrador, is crucial to attaining self-sufficiency in gasoline consumption in Mexico. Nevertheless, PEMEX executives underscore the necessity for additional infrastructure to enable the refinery to augment its supply to the country.

In June 2023, during a Senate meeting, Ulises Hernández, CEO, PEMEX Comercio Internacional, said that to optimize Deer Park's contribution to the national supply, the development of alternative transportation routes, in addition to maritime transport, is imperative.

Octavio Romero, CEO, PEMEX, affirmed that the acquisition of Deer Park has proven to be a beneficial decision for Mexico, with a promising return on the substantial investment of approximately US$1.5 billion. The refinery is already enhancing energy security. According to Alberto Velázquez, Director of Commerce, PEMEX, the NOC anticipates sending 100% of Deer Park's production to Mexico by the first half of 2024, thereby reinforcing energy sovereignty.

As of July 2023, Mexico imported an average of 509Mb/d of gasoline, contributing to 65% of the national supply of this fuel. PEMEX accounted for 73% of this import volume, which equates to around 374Mb/d. In the case of diesel, imports totaled 256Mb/d, also contributing to 65% of the national supply, with PEMEX's share amounting to 63% or 161Mb/d.

Are you ready to set yourself up for success in 2024? Join us at Mexico Business Summit 2023, the must-attend B2B conference for Mexico’s business leaders!

Taking place on Nov. 28-30, 2023, at Expo Santa Fe in Mexico City, this high-level multi-industry conference offers unmatched opportunities to get inside perspectives on key industry trends, access actionable business intelligence, generate pre-qualified leads and identify new opportunities in a unique cross-industry networking environment. 

Mexico Business News offers you an exclusive MX$2,000 ticket discount by using this code: MBS2023MBN2000. 

Don't miss this opportunity and get your tickets here: https://mexicobusiness.events/MBS/2023