On Friday, Mexican President Andres Manuel Lopez Obrador officially opened a significant new oil processing plant. This was a big project for the radical leader, who says it will help the country stop relying on fuel and diesel from other countries.
Even though it is still being built, the state-run oil company Pemex’s Olmeca processing plant is billions of dollars over budget. However, that didn’t stop Lopez Obrador from holding a spectacular inauguration ceremony at the office built just off the Gulf coast port of Dos Bocas in his home state of Tabasco.
In a speech, Lopez Obrador gave pundits a pass for saying that petroleum products shouldn’t be needed for Mexico’s energy future again. He also criticised past governments for not building a new processing plant in almost forty years.
“During this time, they bet on selling crude oil and then buying gas, diesel, and other fuels in places they didn’t know about,” Lopez Obrador said.
Officials have said, though, that the Olmeca treatment facility probably won’t be ready to start filling engines until 2023, because it will take a long time to test after development is done.
Lopez Obrador recently admitted that the cost of constructing the office will be between $11 billion and $12 billion, rather than the $8 billion he initially stated.
In April, people close to the project said it would cost around $14 billion, but different reports have put the final price tag a few billion dollars higher.
Two people who know about the situation recently said that the new treatment facility may be getting close to its capacity in 2025.
The president, who is a radical asset patriot, says that the treatment facility can help wean Mexico off of imported engine power, which is almost all provided by U.S. purifiers. He says this, if true, weakens the power of the country.
He also agrees that the treatment centre could make it easier for Mexican drivers to keep their money safe from the unstable world oil market.
Once it is online, the treatment plant will be Pemex’s biggest. It will be able to handle up to 340,000 barrels of crude oil per day.
In quiet comments before the president’s speech, Pemex CEO Octavio Romero said that the Salina Cruz treatment facility in Oaxaca, which is currently Pemex’s biggest, will be expanded to include a significant new coking plant. This is expected to make it easier to turn heavy crude oil into higher-value fuels.
As of right now, only three of Pemex’s homegrown treatment facilities that are fully functional have coking plants.
Romero said that the Salina Cruz coking plant will be online in a year after the development group ICA Fluor was given a “turnkey” contract.
The Pemex boss didn’t say how much more the project would cost, but he did say that $1.4 billion had already been spent on it before it was put on hold for a long time.