MMEX is a failed proposal, right out of the gate.
I have the requisite engineering background, and relevant industry experience to understand the refining process, and the business as a whole, beyond a layperson’s perspective.
I’ve read MMEX’s S-1, and all the other available material, including permit applications, press, and other legal filings.
MMEX’s S-1 is little more than a mix of artful fantasy, and boilerplate. This is a quote from the S-1, regarding MMEX’s “business plan,” excerpted directly:
"We intend to implement our current business plan in two phases, First, through our subsidiary, Pecos Refining, we intend to build and commence operation of a 10,000 bpd crude oil Distillation Unit that will produce a non-transportation grade diesel primarily for sale in the local market for drilling frac fluids, along with naptha and heavy fuel oil to be sold to other refiners."
As explained in other posts, there is no market for any of the intermediate products (raw diesel) as frac fluid. The only other use would be as intermediate feed or blend stock to an actual refiner, like Alon, WNR/Andeavor, or Holly-Fronteir Navajo, hauled out by OTR truck. Unfortunately for MMEX, all three of these regional refiners have complete, working refineries, than can produce intermediates for conversion from their own crude units. They have no need to purchase these intermediates from another source.
As anyone can see from the widely available schematic that makes up part of this board’s header, a CDU is a tiny part of an actual complete refinery. The intermediate products from atmospheric distillation are not directly marketable in any realistic sense - this is why there are no profitable stand-alone CDU’s in the continental U.S. - the Texas market has sufficient refining capacity, both regional and export, to make the addition of another small-scale refiner like MMEX a non-starter, more so if it is only a topping unit.
As anyone with any industry expertise or experience knows, a topping unit is a zero-margin component of a larger refinery - it cannot generate positive cash-flow on its own. That is a function of physics, chemistry, engineering and economics.
Circular logic surrounding a Phase I project that will be negative cash-flow, used to fund a Phase II project that requires greater than 10X the financial investment, along with actual operating and market expertise fails, even in the most basic debate. There is no business here, at least as proposed by MMEX.
