Mexico's Pemex to upgrade Salamanca refinery in 2012

MEXICO CITY Sat Oct 29, 2011 12:39pm EDT

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MEXICO CITY (Reuters) - Mexico's state oil monopoly Pemex will start upgrading its Salamanca refinery next year in an effort to cut down on gasoline imports, which now account for around 40 percent of national demand.

"We hope to start the reconfiguration of the Salamanca refinery during the first half of 2012," Pemex official Ignacio Aguilar told a conference call with investors on Friday after the company reported a $5.8 billion third quarter loss.

The Salamanca refinery, located in central Mexico, is the fourth largest in the country, with a processing capacity of 245,000 barrels per day (bpd).

Mexico's six refineries process a total of 1.54 million bpd not including the added output from the recently completed expansion of the Minatitlan refinery.

The Minatitlan upgrade increased capacity there to 240,000 bpd, a jump of more than 150,000 bpd, Aguilar said.

Salamanca's reconfiguration plan aims to boost diesel and gasoline production, while reducing fuel oil output.

Announced in 2009, the plan includes the construction of a delayed coking plant with 44,000 bpd capacity and hydro-desulfurization plants, at a cost of more than $3 billion, according to information from Pemex.

Pemex officials hope to cut gasoline imports by 6 percent by 2016 with increased refining capacity to meet growing demand. The state oil monopoly also plans to build a new refinery in the central Mexican state of Hidalgo that would process 300,000 bpd and that is slated to begin operating in 2016.

(Reporting by Adriana Barrera; Editing by Paul Simao)

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