Again, for the second time tonight, please review the correct information about mmex in red:
The company is talking about, and generating PR about building a refinery - that is substantively different than actually building, or having the resources/means to build a refinery. The commentary re. location and land use has nothing to do with agriculture - one can put on a PR show, by obtaining a deed to otherwise worthless, non-marketable land, as a "demonstration" of progress.
Not entirely sure the point of the above. The company is going through the process of building a refinery in stages. Stage 1 is building a CDU which is the first stage of a refining process. It is very clear in the permit application. The application has complicated engineering calculations which requires engineering knowledge to understand
I've reviewed the application, and issued permit. Again, no specialized expertise, other than being literate enough to complete the application is required. There is no extensive review, other than "check box" for a PBR application. It is trivial, and requires only the ability to transcribe from the spec for a CDU and appurtenant facilities into the application. Again, a trivial "investment" in the permit fee, and possibly paying a consultant to prep the application, to demonstrate "progress."
As I've said above, the actual application requires significant chemical engineering knowelge and is vastly, I mean vastly more than a 'check box'. The first couple of pages were check boxes, but the remaining require specific engineering knowledge. The permit reviewer was an engineer and he found it quite well done. The work was done by vfuels, whom MMEX contracted to build the CDU. The vast majority of work is contracted out nowadays. ConocoPhillips uses a third party for big units, why can't mmex?
The S-1 suggests that the 10,000bbl CDU has an associated cost of about $50-million. It is not specified what this cost estimate includes, however a 10Kbbl CDU is modular, and can be done with contemporary skid-mount units for far less than that, inclusive of the heater, steam generation, column, etc. Modern units of this type are common in in-field processing applications, and are essentially off-the-shelf. Some, but not a lot, of engineering is required to cobble one together. Nothing special, and not $50-million worth of hardware...
Only a qualified person in the area of building a refinery in phases can answer the costs about the CDU and all associated costs. Additionally, only a qualified person can answer about a refinery cost and ancillary costs associated. Investors need to understand that ONLY a qualified person can do so! Mmex clearly got a third party qualified person to determine rough costs. That third party btw was KP engineering, who WAS qualified to assess costs
Setting aside transportation and other issues, the use of diesel as a frac fluid is uncommon. In Texas, it requires a special UIC permit from RCT. The side-stripped diesel from a topping unit is "straight" diesel, unsuitable for sale as OTR or un-taxed ag diesel - which must be ULSD (de-sulphured). It has no direct use, other than in downstream refining. Naptha and other light fractions would have to be trucked out, or tanked out - to the north-east, into markets where they are already abundant. AR and heavy fractions are similarly low-value, and not worth transporting out in raw form. Raw gasoline similarly would need to be transported out for further refining. Again, an atmospheric CDU is virtually useless in isolation, marginally more useful with a vacuum unit, but still represents just the front-end of a real refining operation.
Three components will result from the CDU process. Each have their own utility and can be purchased as an upgrade from the feed stock. The CDU itself is not useless in isolation as the three products have value. It is completely misleading and false to indicate otherwise. Only a qualified person in the area of petroleum distillation can make an effective determination. Additionally, the market will also determine whether there is a place for diesel, naphtha and drilling fluids. Of course a cursory review shows this to be the case.
While the S-1 gives this minimal treatment, the South Orient has a 10-mph speed limit south of Ft. Stockton. The line is virtually impassible south of Tinaja, and has seen no traffic in more than a decade. The costs to make the line usable for any significant rail traffic from that point in Presidio County south would be significant, and without the bridge, there is no meaningful reason to do so. This is "catch-22," or chicken-and-egg logic. Without the rail line, MMEX has no means of transporting refined product, other than perhaps by truck, to Mexico, and no real market in the U.S.
Again, please read my comments. TxDOT is helping to build a bridge between Texas and Mexico. This has been widely reported and is also on the mmex website. Please go to the website for the correct and factual info. This is a non issue now (rail transport)
I've reviewed the S-1, and pretty much all material related to MMEX. Facts are facts. Due diligence involves taking a hard look at them.
This is correct, facts are facts. If one were to actually read the S-1, one would understand the plan mmex had laid out and also understand the products of the CDU and the market potential for mexico. I hope this helps!
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