April 30, 2019 / 7:14 PM / 3 months ago

Mexico to announce project manager for new refinery next week

MEXICO CITY, April 30 (Reuters) - Mexico will next week announce which company or consortium will project manage the construction of President Andres Manuel Lopez Obrador’s planned refinery in his home state of Tabasco, the government said on Tuesday.

Lopez Obrador wants to build what would be Mexico’s seventh refinery to reduce Mexican reliance on U.S. gasoline imports, though the project is viewed by many energy experts as uneconomical and potentially risky due to its cost.

Energy Minister Rocio Nahle told reporters in Mexico City that state oil company Petroleos Mexicanos (Pemex) would begin receiving the proposals on Tuesday for analysis. Pemex will announce the winning proposal next week, she said.

Those companies competing for the job include two consortia, U.S.-based Bechtel with Italy’s Techint, and Australia’s WorleyParsons with U.S.-based Jacobs Engineering Group, as well as U.S.-based KBR and France’s Technip bidding individually.

The project manager will oversee the construction and engineering as well as the acquisition of machinery.

Located in the port of Dos Bocas in southern Mexico, the refinery is projected to cost $6 billion to $8 billion, though industry experts believe it could end up costing much more.

Scheduled to go into operation within three years, its processing capacity is due to be 340,000 barrels per day.

Pemex has financial debts of more than $105 billion and financial market participants have expressed concern that any attempt to burden the company with the bill for the project could damage its already precarious credit rating. (Reporting by Adriana Barrera Editing by Dave Graham and Jonathan Oatis)

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