Pemex Lets Contract for Tula Refinery

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(Oil and Gas Journal, Robert Brelsford, 11.Jun.2018) – Mexico’s Petroleos Mexicanos (Pemex), through its processing subsidiary Pemex Transformacion Industrial (formerly Pemex Refinacion), has let a contract to a partnership of Saipem SPA and Mexican subsidiary Saimexicana SA de CV for works to be carried out on the heavy oil (H-Oil) plant at Pemex’s 215,100-b/d Miguel Hidalgo refinery in Tula, Hidalgo state.

As part of the contract—valued at $39.23 million—Saipem will perform rehabilitation and commissioning works at the H-Oil plant, which currently processes amounts of pure diesel and produces hydrodesulfurized diesel with low sulfur content that are sent in bulk to the catalytic plants, as well as obtaining other products, like diesel, sour gas, dry gas, and acid, Pemex said.

The proposed rehabilitation project will upgrade the H-Oil plant to increase production of ultralow-sulfur gasoline in compliance with environmental regulations and expand handling of crude oil for production of other fuels, such as diesel and jet fuel, the operator said.

Upon launch of the tender seeking bids for the project in March, Carlos Trevino Medina, Pemex’s chief executive officer, said he expected the rehabilitated H-Oil plant to be completed by yearend.

Broader transformation

The H-Oil rehabilitation project comes amid the ongoing reconfiguration of the Tula refinery Pemex began in 2014 (OGJ Online, Nov. 18, 2015).

First announced in 2013, the two-phased Tula refinery reconfiguration project is intended to generally modernize crude oil processing, increase efficiency with which vacuum residue is converted into high-value fuels, expand production of higher-value products, increase refining margins, and reduce fuel-oil handling problems at the site, Pemex said in its latest annual report.

While Phase 1 of the project was about 27% completed by yearend 2016, certain works were delayed and rescheduled—including construction of an 86,000-b/d delayed coking plant and associated installations necessary for its operation—due to budgetary constraints.

As of Mar. 31, construction of the coker plant was 60% completed, and Pemex currently is evaluating funding alternatives through alliances and strategic partnerships to complete construction, the operator said.

With Phase 1 of Tula’s reconfiguration now scheduled to be completed by 2020, Phase 2 of the project—which covers construction of additional processing installations as well as modernization and integration of existing units—is slated for completion in 2022, Pemex said.

Once completed, Pemex said it expects modernization of the Tula refinery will enable the site to increase production of refined products to 220,000 b/d from 154,000 b/d, increasing the refinery’s overall performance by more than 40%.

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