Pemex advances ULSD project at Minatitlan refinery

Pemex Transformacion Industrial (formerly Pemex Refinacion), the processing arm of Mexico’s state-owned Petroleos Mexicanos (Pemex), has let a contract to Tecnicas Reunidas SA, Madrid, for work related to the second phase of the country’s ultralow-sulfur diesel (ULSD) project at the 185,000-b/d Lazaro Cardenas refinery near Minatitlan, Veracruz state.

As part of the Phase 2 contract, Tecnicas Reunidas will provide engineering, procurement, construction, and commissioning of two refining units at the facility, including a 30,000-b/d diesel hydrodesulfurization (HDS) unit and a 150-tonne/day sulfur recovery plant, the service company said.

Tecnicas Reunidas’ scope of work under the contract additionally will include modifications to an existing HDS unit at the refinery, as well as corresponding auxiliary services and integration of associated plants located outside Minatitlan’s battery limits.

Valued at $800 million and awarded on a turnkey basis, the Phase 2 EPCC contract has a duration period of 36 months, Tecnicas Reunidas said.

Focused on project implementation, the current EPCC contract for Minatitlan’s Phase 2 ULSD project follows Pemex’s previous award of an open-book, lump-sum $50-million contract to Tecnicas Reunidas in September 2014 for Phase 1 of the project, which under which the service provider completed front-end engineering design, detailed estimates of overall project costs, and purchase of long-term delivery equipment (OGJ Online, Sept. 15, 2014).

In late 2015, Pemex said it would proceed as planned and without delay with Phases 1 and 2 of the ULSD project at Minatitlan, which previously was due to start production of 24,000 b/d of ultralow-sulfur gasoline (ULSG) in April 2015 following construction and installation of a catalytic HDS plant (OGJ Online, Dec. 14, 2015; OGJ Online, Mar. 10, 2015).

Downstream plans

In December 2015, the state-owned company revealed it would spend at total of $23 billion on downstream projects, including another $3.9 billion on additional works related to its previously announced ULSD project investments (OGJ Online, Dec. 9, 2015).

The spending plan also included $3.1 billion for projects at all six of the country’s refineries that, upon completion, would boost Mexico’s overall ULSG production to more than 210,000 b/d, as well as reduce its greenhouse gas emissions by 90%.

While Mexican President Enrique Pena Nieto said the ambitious investment program came as a result of partnerships and alliances formed by Pemex with private and foreign investors following Mexico’s 2014 sweeping energy reform (OGJ Online, Aug. 21, 2014; Aug. 18, 2014), the status and scope of individual projects under the proposed downstream spending plan remain unclear following Pemex’s recent move to cut its 2016 budget by $5.5 billion (OGJ Online, Feb. 29, 2016).

Contact Robert Brelsford at

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