Mexico to Expand Refinery in 2008

Mexico's state-owned oil company plans to complete an expansion of one of its refineries in the second half of next year, part of a plan to reduce gasoline imports, the Energy Department said in a report.

The $2.5 billion project will expand output at Petroleos Mexicanos' Minatitlan refinery by 100,000 barrels a day to 249,000 barrels a day, according to the report, issued earlier this week.

Because of years of underinvestment in its refining network, the company, known as Pemex, currently imports 40 percent of its gasoline, even though it produces 3 million barrels of crude oil a day.

The Minatitlan expansion is part of a $20.7 billion plan to boost refinery output by 39 percent to 1.8 million barrels a day in 2016, up from 1.3 million barrels a day this year.

The expansion plan hinges on a new 300,000-barrel-a-day refinery, set to be completed in 2015 _ if Pemex has enough funds for the $8.8 billion project.

Mexico ranks 15th in global refining capacity, but the only refinery that saw a significant expansion over the past decade was Cadereyta, where output rose to 275,000 barrels a day last year from 235,000 barrels a day in 1996, mainly by producing more diesel fuel.

Pemex also plans to upgrade the Salamanca and Tula refineries, in 2012 and 2013, respectively.