Replies to post #107684 on MMEX Resources Corp (MMEX)

[jmjjw]

Documentation on MMEX’s proposed project is a matter of public record, by necessity.

The Phase I (now Phase I(b)) imaginary “refinery,” in reality a rudimentary crude topping unit is fully documented as part of the materials in MMEX’s TCEQ Type O AQP permit application.

Anyone competent in the field can clearly see that MMEX’s proposed rudimentary crude topping unit is highly flawed, and it is missing several critical components, ranging from the front-end desalter, to pre-flash, and other critical process elements. In fact, I’ve pointed this out since as far back as November/December 2017.

Of note, MMEX was forced to go public about their deficiencies, disclosing that they “forgot” to include a desalter, which has been part of every crude unit for at least the last five decades. MMEX’s incompetence resulted in a $20-million cost overrun, before single component was ever acquired, or plate bent or welded.

The statements:

This is the "construction" phase, when it's completed it will produce refined product of the highest quality. This is a brand spanking new facility using the latest technology. This new technology allows the refinery to have a low operational cost which will allow MMEX to extract the most profit. Plus, it will be environmentally friendly. win win

are unsupported by any fact, or material evidence.

Even with a desalter, MMEX’s Phase I system, if it were ever built could only produce ATB, AGO, and LGO streams, none of which have any direct market use.

There are so many, and such severe flaws and deficiencies in the proposed MMEX Phase I design it would be shut-in within two operating years, even if it didn’t fail economically within the first operating year - as the entire industry knows that a stand-alone crude unit cannot operate at break-even - see Blue Dolphin, Dakota Prairie, etc. for examples.

With more imagination and hope, MMEX’s proposed Phase II system, to the extent any detail has been disclosed, lacks blending capability, and other elements, such that it would be unable to produce refined transportation fuels for the U.S. market, relegating an isolated, stranded, inland (imaginary) facility to the export market, with no means of reaching that market.

Regarding the South Orient rail line, which is owned by TX-DOT, and leased by Texas-Pacifico, those upgrades have been pending for more than two decades - the rail bridge at the Rio Grande is still only partially funded. The sole use of the line has been hauling fracking sand, cement, and pipe into the region, with an almost immeasurable fraction hauling some agricultural products back to the northeast. Portions of the South Orient cross my properties in Brewster, and Presidio counties, and I am well aware of the condition of the system, when the last freight consist went through, etc. Using the South Orient/Texas-Pacifico as a carrot for uninformed, unsophisticated MMEX investors is so far beyond comical there are simply no words. The rehab of the system, just in the U.S. is a $100-million total project, and that does not count the disused, and dilapidated Ferromex segment on the Mexico side of the border.

Of course they don't have those yet. This is the "construction" phase, when it's completed it will produce refined product of the highest quality. This is a brand spanking new facility using the latest technology. This new technology allows the refinery to have a low operational cost which will allow MMEX to extract the most profit. Plus, it will be environmentally friendly. win win

But in the meantime, here's more info that you may not know, Ferromex, Mexico's largest Railroad, owns Texas Pacifico, whose rail line runs through the property that MMEX now owns. They have plenty of money.
AND, the line can be upgraded completely from one end to the other, Presidio bridge to the MMEX oil refining facility, in about 80 days. It's often done on the approximately 140k miles of track in use around the country. Obviously they would need specialized equipment in order to do so but of course that rail maintenance and rebuild machinery has already been developed and in use in other areas of the continental US. They can get it done quickly. Another non-issue.
Seems like MMEX has all the bases covered. Mr. Hanks has thought this through pretty well.

[DirtyDawg]

Thanks, Turbozen.

Sounds completely reasonable.

Your input is appreciated.