Mexico’s new refinery, Olmeca, exported in early April the first cargo of ultra-low sulfur diesel (ULSD) as the refinery is slowly starting up processing of fuels, a source with knowledge of Olmeca’s operations has told Reuters.
Olmeca processed unfinished high-sulfur diesel received from the Madero refinery, the source told Reuters.
Olmeca continues to see marginal production of fuels, while the ULSD cargo was likely Mexico’s first such export from the Dos Bocas site, according to tanker tracking data compiled by Reuters.
The Olmeca refinery was a long-delayed processing facility with a planned capacity of 340,000 barrels per day (bpd). The refinery, also known as Dos Bocas, was a flagship project of former Mexican President Andrés Manuel López Obrador, who sought to reduce Mexico’s dependence on fuel imports from the United States.
Despite being a large crude oil producer, Mexico has been importing a lot of refined petroleum products to meet growing demand while refineries struggle to operate to capacity.
The newest refinery, Olmeca, has seen multiple delays and budget overruns and is now estimated to have needed double the initial budgeted investment.
Initially budgeted at $8 billion, the refinery went into significant cost overruns, with the price tag standing at some $18 billion, according to various estimates.
Despite being one of the largest producers of oil, Mexico will remain a net importer of refined products to meet its domestic demand through 2030, the International Energy Agency said in its annual Oil 2024 report with analysis and forecasts to 2030.
Referring to the Dos Bocas refinery, the IEA said “Reports of its imminent commissioning have waxed and waned as the project continues to face start-up issues.”
The agency expects the refinery to come online “no earlier than the fourth quarter of 2025, with the full ramp-up taking several years.”
Even with higher refinery operations this decade, Mexico will still need around 300,000 bpd of imported fuels in 2030 to meet demand, compared to more than 700,000 bpd in 2023, the IEA says.
By Tsvetana Paraskova for Oilprice.com
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