Mexico's new Pemex refinery still needs important work

Mexican state energy company Pemex is unlikely to produce any commercially viable motor fuels at its new Olmeca refinery before the end of the year, five sources said, despite pressure that it should be ready before the outgoing president's term ends, said Hydrocarbonprocessing.

President Andres Manuel Lopez Obrador, a resource nationalist, inaugurated the 340,000-bpd refinery in July 2022 in his home state Tabasco, billing it as crucial to energy self-sufficiency for Mexico.

However, delays at the refinery in the port of Dos Bocas, whose cost has more than doubled to USD16.8 B, means it will be up to his successor Claudia Sheinbaum to try to make the dream a reality when she takes office on Oct. 1.

As recently as last Thursday, Pemex CEO Octavio Romero insisted during an industry event the refinery would "work at full capacity next month." Now, five sources familiar with the operations told Reuters that it was impossible to meet these targets and that progress had been exaggerated ahead of the June presidential election.

Neither Pemex nor the president's office responded to requests for comment. Two sources with detailed knowledge of the operations said engineers were still working on individual parts of the refinery and will then face the even bigger challenge of linking them.

One of the sources, an engineer, described this last step as a hugely complex and "agonizing" process of trial and error that takes months. The other source, also an engineer, said that in the most optimistic scenario the first of two production lines of the refinery would be ready between October and November.

We remind, British energy giant Shell and Mexico's Pemex could each be fined more than $1 million over a fire at a chemical plant in Deer Park, Texas. The state Attorney General filed the corresponding lawsuit on August 7, 2023 in the Austin District Court. Pemex operates a 312,500 barrels per day refinery located next to its Deer Park chemical plant. Each violation could result in fines of up to USD25,000 per day for each individual polluter, according to the statement.

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Westlake Innovations, Inc., an investment arm of Westlake Corporation, said it has invested in Blackhorn Industrial Impact Fund II, a fund managed by venture capital firm Blackhorn Ventures (Boulder, Colo.), said the company.

The size of the investment was not disclosed.

“The fund seeks to invest in 40 capital-efficient companies enabling the decarbonization of the toughest-to-transition sectors in the US economy,” Westlake said. Blackhorn has focused on investments in the energy, transportation, logistics, and construction and infrastructure, sectors, Westlake added.

Blackhorn Ventures has built a portfolio of 65 companies over the past five years, including some in the industrial and materials sectors. The firm has about USD32 million in ‘dry powder,’ or capital to invest, and has raised USD209 million across 15 funds over the past decade, according to S&P Capital IQ.

We remind, Olin and Westlake filed petitions in April to impose anti-dumping and countervailing duties on imports of certain epoxy resins from China, India, South Korea, Taiwan and Thailand.

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ExxonMobil may need to suspend production at its Gravenchon refinery in northern France if striking workers continue to block access to the site, the oil major said, as per Hydrocarbonprocessing.

The refinery accounts for about 20% of France's refining capacity, the company's website showed. Blockades since Friday have prevented deliveries of goods and materials needed to maintain refinery operations, it said in an emailed statement.

A small group of workers called a strike last month after the company said it would shut down the refinery's steam cracker and close chemical production this year. The site has lost more than EUR500 MM (USD535.55 MM) since 2018 and remains uncompetitive, Exxon said.

Another strike was called on Friday that shut some of the chemical manufacturing units, including the steam cracker. A "limited number of strikers" are still blocking access, Exxon said. "If this continues, we may have no choice but to suspend production from the refinery."

We remind, ExxonMobil Chemical announced plans to close its ethylene and propylene production facility located in the Normandy region of France in 2024. This will happen if appropriate permission is received from the local government. The company is going to stop the operation of the steam cracking unit, launched back in 1967. The plant's production capacity is estimated at 425 thousand tons of ethylene and 290 thousand tons of propylene per year.

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Technip Energies NV and Shell Catalysts & Technologies, a Shell PLC subsidiary, have announced a technology transfer agreement to accelerate the commercialization of Technip Energies’ Bio-2-Glycols technology for bio-based ethylene glycol (EG) production from glucose, said the company.

The agreement allows Shell’s research and development results to be combined with Technip Energies’ bio-based EG technology to offer a more efficient technology for applications in the polyester industry, Technip Energies said. The new combined technology will be commercialized under the Bio-2-Glycols trademark.

“We are confident about rapidly commercializing our Bio-2-Glycols technology,” said Wei Cai, CTO at Technip Energies. “Our objective is to offer this technology in 2025, which will contribute significantly to the net-zero challenge.”

With the deal, Technip Energies said it intends to offer “a bio-based polyester solution” by replacing fossil-based feedstock. By using a bio-sourced monomer, the Bio-2-Glycols technology allows for polyesters to be produced with lower carbon footprints and less environmental impact, the company said.

“By integrating Technip Energies’ expertise with our own development work on Bio-2-Glycols, we're poised to expedite the deployment of sustainable alternatives to fossil-based feedstocks, driving innovation, and together, paving a way for a more efficient and sustainable solution in this area,” said Elise Nowee, president of Shell Catalysts & Technologies.

We remind, Technip Energies has been awarded a contract to build a new naphtha cracker in India. The plant will supply feedstock to Indian Oil Corporation's new petrochemical complex in Paradip (Jagatsinghpur district, India). The agreement includes licensing, basic engineering design, equipment and catalysts, and related services for the naphtha cracker, the engineering company said.

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A PJSC Gazprom delegation during a visit to Iran on Wednesday has signed a strategic memorandum on developing the organization of Russian gas supplies to the country, the company said, as per Interfax.

Gazprom said that it signed the document with the National Iranian Gas Company (NIGC) in the presence of Iran's acting president, Mohammad Mokhber. "The parties take as a premise that they will be further developing the long-term and mutually beneficial cooperation between them," the company said.

Gazprom CEO and management board chairman Alexei Miller and Iranian Oil Minister Javad Owji held a working meeting during the visit. The parties discussed priority steps to implement the memorandum and other areas of collaboration in the energy sector.

This is the second time that Gazprom management has visited Iran this year. Gazprom reported on two contracts for all of 2023, the first one during a visit to Iran in February, and the second one during the Russian Energy Week forum in Moscow in the autumn.

PJSC Gazprom has a functioning representative office in Iran.

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