Permian Refinery Project Gets EPC Contractor

The developer of a grassroots Permian Basin oil refinery on Monday named the overall engineering, procurement and construction (EPC) contractor to complete detailed engineering and construct the facility, which will be located in Pecos County near Fort Stockton, Texas.

“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,” Jack W. Hanks, president and CEO of MMEX Resources Corp., said in a written statement.

Hanks said that his company’s selection of Blanchard Industrial, LLC (BIL) to lead EPC represents a “giant leap forward” for the project, which comprises two phases:

• Building a 10,000-barrel per day (bpd) crude distillation unit (CDU) that will produce diesel, naphtha and residual fuel oil
• Building the actual 100,000-bpd refinery that MMEX states will produce a “full slate of refined products”

“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 the MMEX statement sent to Rigzone.

MMEX’s two-phase project will increase by 25 percent the Permian Basin’s approximately 300,000-bpd oil processing capacity. Existing refineries are located in Big Spring and El Paso in Texas and in Artesia, N.M. MMEX’s website states that the CDU will produce No. 2 diesel fuel (low-sulfur “on-highway” diesel), naphtha and residual atmospheric tower bottoms (ATB) and should begin commercial operations by the end of 2019. The company is developing the facility along the Texas Pacifico Railroad at Sulfur Junction, located approximately 20 miles northeast of Fort Stockton.

According to MMEX, the region needs a facility capable of processing lighter crudes that are abundant in the Permian, Moreover, it contends the Pecos County refinery’s rail access will facilitate exports of diesel, gasoline, jet fuels, liquefied petroleum gas and crude oil to western Mexico, Central America and South America.