UPDATE 1-Mexico sees refinery costing up to $10 bln

(Recasts, adds clarification from Pemex spokesman)

MEXICO CITY, Jan 20 (Reuters) - A planned new oil refinery in Mexico could cost up to $10 billion, the head of the state oil company Pemex said on Tuesday.

Pemex pegged the cost of a new refinery at $8.17 billion in a report released in July with additional spending for infrastructure ranging between $852 million and nearly $2.6 billion depending on where the plant was sited.

"The refinery itself will cost around $9 billion to $10 billion although we will have to see how much this could go down, given everything that is happening in global markets," Pemex president Jesus Reyes Heroles said in a radio interview.

A Pemex spokesman explained Reyes Heroles was speaking of the entire project and the company had not revised its cost estimate for the project from the study in July.

Pemex is currently evaluating where the new refinery will be built and hopes to begin early construction work by the fourth quarter of 2009, Reyes Heroles said.

Mexico has not built a new refinery in years and the country now relies on imported fuel for more than 40 percent of gasoline consumption. Imports of diesel fuel and other refined products are also rising.

"A year, more or less, is needed for the basic engineering but at the same time we can begin with some site preparation works ... It is the intention of Pemex to start this around the final quarter of this year," Reyes Heroles said.

Pemex had been optimistic site preparation work could begin earlier but the company has been subject to intense lobbying by politicians seeking to have the refinery located in their home states.

Tula, near Mexico City and the Gulf of Mexico port of Tuxpan northeast of the capital were seen as the least costly locations to build the refinery in the July report.

The company has stated repeatedly economic considerations will be primary in choosing where the refinery will be built. (Reporting by Robert Campbell; Editing by Anshuman Daga)