New refinery construction start nears

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Some 20 miles north of town near Sulfer Junction, down a simple county road and further down a freshly bladed trail of flat dusty desert, lies the site of a proposed multi-million dollar refinery as envisioned by Jack W. Hanks, CEO of MMEX Resources. If things go as planned, the newest refinery in America will be receiving and shipping tens of thousands of barrels of product a little over a year from now.

“The idea was to be in a location where we have the crude supply and infrastructure already built so we can go east and west,” said Hanks. “This will be the first refinery that has been built in 47 years in the United States.”

Much ballyhoo was made last year when Hanks proposed the massive project. Estimates reported the total project to cost upwards of $450 million to build out over several years. Jobs were promised and a commitment was made to jump head-in to the Permian Basin shale play. Monday's show-and-tell was a chance to show U.S. Rep. Will Hurd and an assortment of investors that the wheels were moving and that construction should begin soon.

Hanks explained that three types of product would be refined at his site initially, all non-transportation fuels like off-road diesel, naphtha, and residual fuel oil. A second phase would make transportation fuels like gasoline and jet fuel.

The first phase of construction will cost $50 million and should produce 10,000 barrels per day and comprise of footprint of 10 acres. Estimates call for 100 workers to be employed during peak construction with a finished plant employing 27-30 workers in three-shift days.

Phase two is a much larger vision of 150 acres, capable of refining 50,000-100,000 barrels per day. That job is expected to employ 400 workers during construction with 50 on-board permanently when the full-scale refinery is open, some three years from now. The cost of that project could range from $500-875 million to build.

“No matter how you slice that, it's going to be a large tax base for the county,” Hanks said. “It's not something that everyone will see [because of the location.] It's state-of-the art, it has all of the environmental controls. Everything is new, it's not refurbished equipment. It will all be state-of-the-art with emissions controls and everything else that's required.”

Hanks is no stranger to the world of refining. He began his oil career in Midland in 1987, purchasing several companies. He sold them off in 1992 and went to Peru to build a $296 million natural gas plant under the Maple Resources banner. When the action got hot back in Texas, he returned home to look for a suitable spot along the coast to put a refinery to ship product to Latin American countries. But he figured his best bet was to go to where the oil was, which brought him to the Permian Basin.

The goal is to have the product brought to the plant via truck. After it is refined, it will leave three different ways: two by truck and one by rail. The property — formerly owned by Fort Stockton native Hayes Parker — abuts the Texas Pacifico Railroad, and agreements have been made to utilize that system to output some of the fuel.

The particular set of tracks is owned by the State of Texas but is maintained by Pacifico Transportation, Inc. under a lease with the Texas Department of Transportation. The line — dubbed the South Orient Rail — runs 391 miles from Presidio up to Coleman. Once the Presidio-Ojinaga International Rail Bridge is repaired, which was destroyed by fire in 2008, Hanks sees possibilities where his cargo could be shipped deep into Mexico.

“I had known about the Texas Pacifico Railroad for some time. The interconnection to Mexico is very interesting,” he said.

He also sees a chance to partner with some of the pipelines in the area to carry the various products from the refinery, but he says that agreement would still be years into the future.

Hanks concluded the field trip by taking a Trans Pacifico Hy-Rail ride with the congressman and various officials back into town to hold a round table discussion with directors and operations managers of several regional energy companies.

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