Mexico's Pemex to revive its petrochemical industry in new era of growth, new president says

Mexico's new president Claudia Sheinbaum Pardo and her team are working on an energy plan that will strengthen the national petrochemical industry, which had been forgotten for years.

During her administration, Pemex will explore new sources of revenues, including the petrochemical industry and even lithium mining, Mexican President elect said July 30 during a press conference with reporters. The plan will be made public in October, when Sheinbaum Pardo takes office.

"Pemex needs to reactivate its petrochemical industry, which utilizes natural gas and condensates," Sheinbaum said. A bit was done during the administration of President Andrés Manuel López Obrador with fertilizers, but it's not enough, she said.

According to Pemex data, its fertilizer production grew by 97% during the López Obrador administration to 1.5 million mt, as a result of the reactivation of its urea and ammonia plants, which had been inactive since 1999.

Early in July, Pemex signed a $1.2 billion deal with infrastructure developer Mota-Engil for the construction of a fertilizer plant in the state of Veracruz.

In the case of lithium, Pemex will explore ways to participate in the business together with LitioMx, the company Mexico recently created after it nationalized lithium. LitioMx will eventually develop the national reserves, which, according to the US Geologic Service, are roughly 1.7 million mt.

Pemex will maintain the premise developed under the current administration to only produce the enough crude for its own refining needs, Sheinbaum said. The goal of the López Obrador administration has been to reduce the country's dependency on imported fuels. Sheinbaum said she intends to keep that goal.

In June, Pemex produced 1.47 million b/d of crude; 269,000 b/d of condensates, and 4.42 Bcf/d of gas. The company recently reached the highest level of crude processing at its six existing refineries since the second quarter of 2016 at 1.2 million b/d, its CEO Octavio Romero Oropeza said recently.

"When we deliver the government to the new administration in September, we will have a processing capacity at the refineries of 1.7 million b/d," Romero Oropeza said.

Total production of fuels will be close to 1.3 million b/d by the first quarter of 2025, including the production of the Deer Park refinery Pemex owns in Houston, he said. So far in 2024, the average has been 757,000 b/d, including the production of Deer Park, he said.