Pemex Says Mitsui, SK May Bid for $2.1 Billion Tula Project

  • Company looking for partner to develop, operate Tula coker
  • Pemex said to start bidding process at refinery in next weeks

Petroleos Mexicanos has identified Japanese trading company Mitsui & Co. and South Korea’s SK Engineering & Construction as among potential partners for a $2.1 billion project at the company’s Tula refinery which will turn lower-value fuel into products like gasoline and diesel.

Others that may participate in the joint venture to develop and operate the coker unit at Tula include PetroChina Co., China’s largest oil producer; China Petroleum & Chemical Corp., known as Sinopec; Royal Dutch Shell Plc and Chevron Corp., according to a spokesman who couldn’t be identified because of company policy. Pemex will ask for formal bids in the next few weeks, said a person with knowledge of the matter, who asked not to be identified because the information is private. 

The Tula plans are part of a broader effort to improve operations at Pemex, which has delayed maintenance at its six refineries because of budget cuts following 12 years of declining crude output. Tula, Pemex’s second-largest refinery, is operating at 62 percent of its 315,000-barrel-a-day capacity. The refineries together had as many as 88 unscheduled stoppages last year, and four of seven major maintenance plans were deferred to 2017 and 2018.

SK is considering participating in the project but hasn’t yet made a bid, according to a spokesman who asked not to be identified because of company policy. Beijing-based spokesmen for Sinopec and PetroChina declined to comment as did representatives for Mitsui and Chevron. A Shell spokeswoman didn’t immediately comment.

Italian oil major Eni SpA, which was also identified by Pemex as on its potential-bidders list, isn’t interested in developing or operating Pemex’s Tula coker unit, according to a company spokeswoman who asked not to be identified citing company policy.

Carlos Murrieta, director of industrial transformation at Pemex, said in November that the company was in talks with at least three consortium groups “very interested” in overseeing the execution, operation and completion of that unit. Murrieta said at the time the contracts would likely not take the form of sales-and-leaseback agreements.

Pemex hired Bank of America Corp. last year to explore strategic options for the Tula unit and to help it find partners for its refineries. The state-run energy company will prioritize plans to find refinery joint ventures once the Tula coker sales process has advanced, the person familiar said.

— With assistance by Ichiro Suzuki, Heesu Lee, Aibing Guo, Joe Carroll, Angelina Rascouet, and Rakteem Katakey

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