Late last week Jack Hanks, president and CEO of MMEX Resources, met in Midland, Texas, with midstream operators and crude aggregators. The immediate topic was the $450 million, 50,000 barrel per day (Mbbl/d) refinery that his company proposed building at Sulfur Junction, 20 miles northeast of Fort Stockton, Texas, at the southern end of the Permian Basin. Construction is slated to begin in early 2018, following the permitting process, and the facility is projected to begin operations in 2019.

 

In absolute volume terms, 50 Mbbl/d is a rounding error against the basin’s current production of 2.2 MMbbl/d.  MMEX plans to bring crude in by pipeline, rail and truck, so the ‘what’ and the ‘how’ of the project were easy questions for the suppliers to answer. The matter of ‘why,’ however, poses a broader question to the Permian midstream.