Mexico's Pemex motor fuel production dipped last month

Motor fuel production from Mexico's state-owned oil company Pemex dipped last month, company data showed, falling short of ambitious government refining targets meant to wean the country off its long-standing dependence on foreign supplies, said Reuters.

The inability to significantly grow its gasoline and diesel volumes marks a fresh setback for President Andres Manuel Lopez Obrador, who over five years in office has prioritized domestic production, arguing that the country's energy sector must be self-sufficient.

In May, crude processing at Pemex's six domestic refineries fell 4% compared to the same month last year. During the month, the state-run facilities only processed about 759,000 barrels per day (bpd), or less than half their 1.6 million bpd capacity. The monthly figure was Pemex's lowest level of oil refining since last June, according to figures published Monday.

Pemex did not respond to a request for comment on the data. Most troubling, according to analysts, is the growing production of highly-contaminating fuel oil, which has seen Pemex's global market sharply reduced in recent years due to environmental concerns but is nonetheless burned to generate electricity at major local power plants.

At nearly 274,000 bpd, fuel oil volumes eclipsed gasoline and diesel output, which during the month reached about 262,000 bpd and 126,000 bpd, respectively. Lopez Obrador, a leftist resource nationalist, has said he wants Pemex to process at least 1 million bpd of crude oil, while slashing fuel imports mostly from U.S.-based refiners.

When he ran for president in 2018, he pledged to end the imports altogether by 2024, a goal seen by analysts as impossible to achieve in his final year in office. The company has blamed the previous administration for failing to upgrade the country's aging, local refineries. Half of them are unable to efficiently process Mexico's increasingly heavy crude oil output because they lack coking units that can squeeze more higher-value gasoline and diesel out of the heavy crude.

The government has pinned its hopes for a rebound on a seventh domestic refinery, the Olmeca facility, which when completed will be Pemex's biggest. Located just off the Gulf Coast port of Dos Bocas, Olmeca is billions of dollars over budget and has yet to produce its first gasoline.

Lopez Obrador also boosted Pemex's refining capacity by fully acquiring the Houston-based Deer Park refinery in 2021, but officials have acknowledged that most of its refined products are purchased by U.S. buyers rather than helping meet demand from Mexican motorists.

We remind, Pemex’s production of aromatics, ethane, propylene, and sulphur fell in the first quarter, year on year, but methane output rose strongly. The rise in production of methane and its derivatives helped overall petrochemicals production to remain mostly flat, with 319,000 tonnes produced during the first quarter, down by 0.62% year on year.

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Solvay, a global market leader in polymer and composite materials, signed a long-term agreement with Zotefoams, the world’s largest manufacturer of lightweight cross-linked polyolefin block foams and a specialist in innovative technical foams, for the supply of Solef® polyvinylidene fluoride (PVDF), said the company.

Solef® will be used to produce Zotefoams’ ZOTEK® F high-performance closed cell crosslinked aerospace foam range. The collaboration will target a wide range of interior applications in aerospace including ducting, carpet underlay, environmental control systems and insulation, where low weight, high flame retardancy and cost-effective processability are paramount.

“This agreement marks the starting point of a collaborative partnership towards supply security, quality and innovation,” says Marc Doyle, Executive Vice President for Aerospace & Defense of Solvay Materials Business. “It opens exciting new perspectives for weight reduction as well as noise and vibration management for interior components thanks to Solef® PVDF, extending the reach of our polymers into yet another demanding market segment. We are excited to partner with Zotefoams in helping the aircraft industry achieve its ambitious environmental and sustainability targets."

Solef PVDF is inherently flame retardant and combines a high degree of purity with robust mechanical properties, electrochemical stability and broad chemical resistance at high temperatures. The specialty polymer already has a history of proven success in various markets including fast growing lithium-ion batteries for Automotive. Formed to deliver lightweight closed cell cross-linked foams, it can provide weight savings of up to 70% in aircraft interiors while meeting the strictest aerospace standards.

We remind, Solvay has opened a new application development lab (ADL) in Shanghai, China, to expand its global footprint of its research and innovation facilities. The new facility will develop solutions for applications industries including automotive, new energy, life solutions and pharmacy, smart devices and semiconductors for Solvay’s customers active in local and global end markets.

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INEOS Energy Trading has today signed agreements with Mitsui O.S.K. Lines (MOL) for two new build LNG carriers, to be used for the import of LNG into Germany from the United States, said Hydrocarbonprocessing.

These agreements are a significant milestone for INEOS Energy Trading, following the long-term Sales and Purchase Agreement signed with Sempra for 1.4 mtpa of supply out of Port Arthur and the purchase of long-term regasification capacity in Brunsbuttel, the German LNG terminal.

INEOS will capitalize on its experience as the largest transporter of ethane gas from the US to Europe and Asia, to develop a ‘pipeline’ of LNG into Europe to service its own demand, as well as that of select third parties.

Both vessels have a capacity of 174,000 m3. They are being built at the Okpo Shipyard in South Korea and will be equipped with the latest MAN Energy Solutions engines (ME-GA). The addition of Air Lubrication technology and Shaft Generators means the vessels are expected to be highly efficient.

David Bucknall, CEO of Ineos Energy Trading said “it was extremely important that we selected modern, efficient vessels with environmental considerations embedded in the design. We agreed an engine type and vessel specification with MOL that we believe is optimal for reducing carbon emissions and methane slip. We will continue to work with MOL to identify further opportunities to reduce emissions as both companies work towards a net zero future."

Whilst INEOS has an extensive fleet of ethane and naphtha carriers, these two vessels signify their first entry into the LNG carrier market. Bucknall adds “we are delighted to be working with MOL, who have a great deal of experience shipping LNG and an excellent reputation. We look forward to developing the relationship, both during the charter period and beyond."

We remind, Ineos Olefins & Polymer Europe has signed a renewable power agreement with Skagerak Energitjenester to provide 100 % green energy to its Rafnes and Bamble plants in Norway. Combined with the recently announced Ineos Inovyn deal in Norway, all of Ineos’ assets in the region are now supplied with 100 % green power generated from hydroelectric production.

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Kent, a leading engineering company in the energy and chemicals industries, has been appointed as the Front-End Engineering Design (FEED) contractor for potential expansion of ExxonMobil’s advanced recycling facilities, said Hydrocarbonprocessing.

Kent will provide FEED services for potential new units across seven sites under this advanced plastics recycling global portfolio program, based on the success of a trial unit in Baytown, Texas designed by Kent during 2021 and 2022. The new such units are under assessment at ExxonMobil facilities located in Baytown (Texas), Beaumont (Texas), Baton Rouge (Louisiana), Joliet (Illinois), Sarnia (Canada), Rotterdam (The Netherlands) and Antwerp (Belgium). The first unit at Baytown started up late last year as one of the largest advanced recycling facilities in North America.

Tush Doshi, COO at Kent, said: “We are proud to be associated with this project to complete FEED services for ExxonMobil’s advanced recycling projects. The win is a testament to the fantastic work we have been doing in the field of recycling waste. It is a milestone project, and this exciting program will demonstrate how the recycling process is evolving to become more efficient and pave the way to a better future for our planet."

By turning difficult-to-recycle plastic waste back into raw materials that can be used to make new plastic and other valuable products, ExxonMobil’s advanced recycling technology can divert plastic waste from landfill or incineration and help to meet customer goals for circularity.

Sean McNelis, ExxonMobil’s Venture Project Manager, commented: “Advancing this portfolio of projects into FEED is an important milestone as we look to expand advanced recycling globally to help achieve a more circular economy.”

We remind, SK Geo Centric has introduced Korea’s first platform utilizing ‘blockchain technology’ for recording and tracking the history of recycled plastic materials. By leveraging the tamper-proof nature of blockchain, it aims to ensure that customers can be rest assured when using recycled plastic materials and expand the materials’ range of use.

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Petronas in collaboration with ASEAN energy operators, governmental agencies, and international organisations, launched the ASEAN Energy Sector Methane Leadership Program (MLP) and announced methane abatement flagship projects in collaboration with Japan Organization for Metals and Energy Security, said the company.

The event took place at the Methane High-Level session on 26 June during the Energy Asia 2023 conference, which spans from 26 to 28 June, 2023, at the Kuala Lumpur Convention Centre.

Minister of Natural Resources, Environment and Climate Change (NRECC), Nik Nazmi Nik Ahmad, highlighted the significance of ASEAN's collective voice, stating, “I am particularly heartened to learn of the private sector's collaborative efforts through the Methane Leadership Program. As noted, human capital will be crucial in helping Malaysia achieve its NDCs and the Global Methane Pledge, which aligns well with the goals of the Paris Agreement."

The ASEAN Energy Sector Methane Roundtable was established in October 2021, with the objective to promote collaboration on methane emissions management in the oil and gas sector. Through the six-monthly roundtable series, we recognised the importance of upskilling the key practitioners in the sector to address information asymmetry and the need of capability building on cost-effective solutions on methane emissions abatement.

We remind, Petronas has signed two Project Development Agreements with ExxonMobil Exploration and Production Malaysia Inc. (ExxonMobil) to jointly pursue Carbon Capture and Storage (CCS) activation projects in Malaysia.
Under the agreements, both parties will define next steps, including the maturation of technical scopes for the CCS value chain, evaluation of the identified fields for CO2 storage utilisation, development of appropriate commercial framework and establishment of advocacy plan support on regulations and policy development in enabling CCS projects.

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