Mexico could take multiple paths toward energy self-sufficiency: Fuel for Thought

Mexico President-elect Andres Manuel Lopez Obrador has planned sweeping changes to the country’s energy landscape. Among the key goals of the incoming administration is to make Mexico self-sufficient when it comes to its energy needs, including meeting its rising motor fuel demand. A capstone to Lopez Obrador’s plan is construction of a new refinery that will end Mexico’s dependency on imports of refined products and cut domestic prices. However, considering Mexico’s tight public finances and state-owned Pemex’s unsustainable debt levels, there are many alternatives to building a new refinery the incoming government could evaluate. The incoming administration said a new refinery in Southern Mexico will be built in three years at a cost of $8.5 billion, but the project’s capacity and how construction will be financed is still unclear. However, Rocio Nahle, the incoming energy secretary, has said the new administration seeks to increase the country’s refining capacity from 1.6 million b/d today to 2.2 million b/d. That cost estimate to build the new refinery could be on the low end based on recent projects. Last year, Hartree Partners projected that building a 100,000 b/d greenfield refinery in Guyana would cost $5 billion due to the expenses of associated auxiliary… continue reading

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Source: CTRM Center

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