Pemex Goal: Retake Home Market


JERSEY CITY, N.J. – Mexico today relies on imported base oils to meet its growing appetite for lubes, but with Pemexs planned API Group II expansion, targeting 9,300 barrels per day by 2018, the national oil company hopes to regain its home market.

Juan Carlos Jimenez, base oil specialist with Pemex Refinacion, described Mexicos base oil market and Petroleos Mexicanos future base oil plans at the ICIS Pan-American Base Oils & Lubricants Conference here Dec. 6.

Although there is an overall base oil surplus on a worldwide basis, Jimenez said, shortages exist in some regions, including Mexico, which must import base oils. Mexico is mainly a Group I market, but some Group II and Group III have been imported, as U.S. prices have fallen in the second half of 2013.

Mexicos only base oil refiner, Pemex reports installed Group I capacity at its Salamanca plant of 6,000 b/d, but actual production this year is only 4,800 b/d, down 4 percent from 2008. In 2012, Mexico imported 6,066 b/d of paraffinic base oils, of which 74 percent was Group I, 25 percent was Group II, and just 1 percent was Group III.

Three factors are pushing Pemex to Group II base oil production, said Jimenez: the lower quality of the crude oil processed, changes in technological requirements, and the desire to gain greater market share. The limited supply of good quality lube crudes needed for Group I has resulted in reduced production, he explained.

Because technical requirements for consumer automotive lubricants include low volatility, low viscosity, low sulfur content, high viscosity index and high oxidation stability, Group II is replacing much of the Group I used in these oils. Mexico is estimated to produce more than 3 million vehicles by the end of 2015, Jimenez noted, double the units produced in 2009.

Pemex, said Jimenez, plans to upgrade its lube plants to produce a combination of Group I, Group II and potentially Group III base oils, and to incorporate feedstock flexibility, including the use of Maya crude as a blend. In addition, the plant will produce wax if necessary.

The project is scheduled for completion in 2018, and projected total base oil capacity will increase to 9,300 b/d. And, Jimenez concluded, we will gain most of the market.