Mexican state-owned oil company Petroleos Mexicanos, or Pemex, may build two new refineries to meet burgeoning demand, Chief Executive Jesus Reyes Heroles said Friday.

Pemex must "consider the possibility to expand capacity of refining," and this could entail adding "a couple of new refining projects for Mexico," Reyes told the U.S.-Mexico Chamber of Commerce.

In 2006, Pemex imported a total of 364,000 barrels a day of products, including 274,000 barrels a day of gasoline, he said.

"That's why we need to run" to expand refining capacity, he said.

Pemex hasn't built any new refineries since 1979, and although a modernization program underway is adding capacity, it isn't enough to keep up with demand, he said.

"Reconfigurations add some capacity but aren't enough to attend the domestic market," Reyes said.

The overhaul of the Minatitlan refinery is now expected to be completed by the end of 2008, because of "a few months' delay in construction," Reyes said. The company also plans to modernize its Salamanca, Tula and Salina Cruz refineries, he said.

Copyright (c) 2007 Dow Jones & Company, Inc.