Mexico is expected to increase imports from the U.S. with Pemex’s biggest refinery out of service for at least two weeks.
The Salina Cruz plant, which can process 330,000 barrels a day, will be offline until at least the first week of July, a press officer who asked not to be identified because of Pemex policy said Tuesday. Tropical Storm Calvin hit the refinery on the southern coast, causing an overflow of oil that then caught fire.
The U.S. has plenty of gasoline to export as Gulf Coast refiners run at record-high rates, Mark Broadbent, principal research analyst at Wood MacKenzie in Houston, said by telephone. “Pemex may be able to raise the rates at their other refineries a little bit to make up some of the gap, but the bulk will be coming from increased imports,” he said.
Gasoline prices may rise on the U.S. West Coast if Pemex doesn’t have the plant up in a couple of weeks, Energy Aspects Ltd. analyst Robert Campbell said. Salina Cruz produced about a quarter of Mexico’s gasoline in the 12 months ending in April, he said.
“That’s a chunky amount,” he said by phone from London. “You could see very strong gasoline and diesel imports comparable to levels seen in the third quarter of last year.”
Campbell said the refinery outage may combine with tropical storm activity in the Gulf of Mexico to affect supplies and transport of fuel in the region.
“Pemex has a track record of sometimes being optimistic about these things,” he said. “It will be interesting to see if there is any hurricane activity on the Gulf Coast this week if that has an impact on product availability given the extra stress from Latin America.”
Pemex is seeking investors for its refineries, which have suffered from a chronic lack of maintenance and cost Pemex as much as 100 billion pesos ($5.5 billion) in losses.
The incident at Salina Cruz could hurt that search, Broadbent said. “If they are having to shut down their whole refinery for fires, it’s certainly going to lower the value of the refinery to a potential partner that is looking to invest.”
Source: Bloomberg.com
