IEnova and Trafigura execute purchase and sale and joint venture agreements

IEnova press release

Infraestructura Energética Nova, S.A.B. de C.V. ("IEnova"), through one of its subsidiaries, and Trafigura announce the execution of a long-term terminal services agreement for 740,000 barrels of storage capacity of a marine facility for the receipt, storage and delivery of refined products in Manzanillo, Colima. As part of the agreements, IEnova also acquired 51% of the equity of the company whose subsidiary owns certain permits and land where, subject to the issuance of the remaining permits and other conditions, the project will be built. Affiliates of Trafigura retained 49% of the equity of the project. Both companies entered into a Joint Venture Agreement governing the development, construction, and operation of the project.

IEnova will have control over all aspects of project implementation, including finalizing permits, securing customers for the additional capacity, and completing detailed engineering, procurement, construction, financing, operation and maintenance of the terminal. The project's estimated investment is approximately US$200 million dollars, and the company anticipates, subject to the timing of issuance of the remaining permits, the start of commercial operations at the end of 2020.

The project scope includes a marine terminal for the receipt, storage and delivery of refined products. The terminal will be capable of loading refined products onto rail and trucks, which will enable its customers to supply fuels to demand centers in the Manzanillo, Colima area as well as in Guadalajara, Jalisco, which is the second largest demand center in Mexico. It is estimated that the initial phase of the terminal will have a storage capacity of 1.48 million barrels with opportunities for expansion.

The Manzanillo terminal is IEnova's sixth refined products terminal in Mexico, which demonstrates its commitment to developing infrastructure in the country that enhances energy security and the reliability of refined product supply. This project also fits within IEnova's strategic plan of portfolio diversification that the company embarked on over the past few years.