Mexico investment plan’s energy projects focus on Pemex refining

FILE PHOTO: The logo of the Mexican state oil firm PEMEX is pictured during a protest against Senator Samuel Garcia’s proposal to close down the Cadereyta refinery as a measure to lower the levels of pollution in the air, in Cadereyta on the outskirts of Monterrey, Mexico August 6, 2020. REUTERS/Daniel Becerril

MEXICO CITY (Reuters) – A $14 billion investment plan unveiled by the Mexican government on Monday focuses energy outlays on the refining business of Petroleos Mexicanos (Pemex), aiming to boost the state oil firm’s ability to process heavy crudes.

The plan, which comprises some 99 billion pesos ($4.65 billion) in energy projects, did not appear to include major new oil exploration and production investments, despite Pemex’s declining crude output and private sector lobbying for them.

The top item is a 54.7 billion peso project to complete a partly-built coking plant at Pemex’s Tula refinery in central Mexico. The project was begun by the previous government.

The so-called deep conversion refining project would allow more output of higher-value motor fuels like gasoline and diesel from Pemex’s mostly heavy crude production, while minimizing less valuable fuel oil.

The plan pledges 15.4 billion pesos for upgrades to Pemex’s existing coking plant at its northern Cadereyta refinery.

Another 25.2 billion peso investment is slated for a project to build a natural gas liquefaction plant at the southern port of Salina Cruz, where Pemex’s biggest refinery is.

Two smaller energy projects announced by officials include a Pemex ethane terminal at the Gulf Coast port of Pajaritos, as well as a new fertilizer plant.

The investment plan was announced by President Andres Manuel Lopez Obrador and business leaders on Monday morning to help to lift Mexico’s ailing economy.

Reporting by David Alire Garcia; Editing by Steve Orlofsky