New US refineries to boost gasoline exports to Mexico

Two refineries planned for Texas will increase gasoline and diesel exports to Mexico and beyond.

Texas-based Raven Petroleum plans to build the South Texas energy complex near the Mexican border at Laredo, a 55,000b/d capacity refinery with direct railroad access to Mexico via Kansas City Southern's network. It would be the only refinery in the area, and aimed specifically at supplying the Mexico market.

The refinery would produce gasoline, diesel, naphtha and LPG gas products, according to Raven's description of the project.

"The newly deregulated Mexican energy market and the surplus of Texas crude oil unlocked by the shale revolution are what make this the perfect opportunity," according to the company's website.

By focusing on the export market, the company will be able to overcome the high cost and barriers to entry by avoiding directly competing with majors such as Exxon and Shell, it said.

MMEX

Earlier this month, MMEX Resources announced plans to construct a US$450mn, 50,000b/d-capacity refinery in the Permian basin in west Texas, which would export refined products to Mexico and South America, according to press reports.

Construction of the project is slated for 2018, with a 2019 completion target.

Mexico currently imports around 66% of its gasoline due to insufficient domestic refinery capacity, and imports have surpassed domestic production since 2014 despite ongoing projects to upgrade existing refineries and increase production of low-sulfur gasoline. Mexico is also in the process of liberalizing its fuel market, putting an end to Pemex's fuel imports and sales monopoly and opening the doors for private firms to compete.

"The opportunities are huge in Mexico's gasoline and diesel market," Beau Freyou, director of IVG Energy brokerage in Houston, told BNamericas in an interview in February.

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