MMEX Resources Corp. announced this week that Blanchard Industrial, LLC will be the engineering, procurement and construction contractor for its planned refinery in Pecos County located about 20 miles northeast of Fort Stockton near the Sulfur Junction spur of the Texas Pacifico railroad.
The first phase of the refinery could be in operation by the second half of 2019.
Jack W. Hanks, president and CEO of MMEX Resources Corp., called the agreeing to a contractor giant leap forward” for the project.
“"We are excited to announce that after several months delay, we have now selected the overall EPC contractor to guide MMEX to financial closing and project completion,” Hanks said in a written statement. “Given the current Permian Basin exponential increase in oil and gas drilling and construction, resulting in 30 plus percent cost increases in steel, cement and labor rates, not to mention all the labor shortages, we have searched for the right EPC firm that can give us and our financial partners the confidence to deliver this project on time and on budget.”
According to a press release from MMEX, Blanchard will complete the engineering of the crude distillation unit, and then build the first phase of the Pecos County Crude Distillation Unit refinery, which will produce No. 2 diesel fuel (low-sulfur “on-highway” diesel), naphtha and residual atmospheric tower bottoms (ATB). The first phase will produce up to 10,000 barrels per day.
The value of the contract was not disclosed.
Phase 2 of the project will include a full-scale crude oil refinery with capacity of up to 100,000 barrels per day. That phase will produce a wider range of refined products.
The Pecos County location is situated on the prime railroad corridor of the Texas Pacifico-South Orient Railroad that connects the Dallas-Fort Worth area, the Texas Gulf Coast, and Mexico at Presidio border crossing.
MMEX has said that the region is in needs of a facility that can process lighter crudes that are abundant in the Permian, It sees the Pecos County refinery’s rail access as critical to facilitate exports of diesel, gasoline, jet fuels, liquefied petroleum gas and crude oil to western Mexico, Central America and South America.
When both phases of the project are completed, the oil-producing capacity of the Permian Basin will increase by 25 percent. The basin’s current capacity is 300,000 barrels per day.
It will join existing Permian Basin refineries in Big Spring and El Paso, and in Artesia, N.M.
“We are very excited to be working with MMEX on this visionary project and look forward to being an active partner to help supervise and manage the engineering and construction phases to commercial operations,” Toby Blanchard, BIL’s president, said in press release.