Mexican private storage projects set to boom

The rapid proliferation of private fuel stations in Mexico is spurring a boom in maritime hydrocarbons storage with offtakers like Vitol, ExxonMobil and Shell taking advantage of the cheaper costs of bringing products through ports instead of terrestrial transport.

At least 10 private hydrocarbons storage facilities will come online in 2020, according to a study by IHS Markit subsidiary OPIS oil price information service.

This would include a “significant increase” in marine port infrastructure by December, Daniel Rodríguez, OPIS senior editor for the Mexican fuel market, told BNamericas.

Storage remains a weak link in fuel supply. Mexico has fuel stored to cover only around three days of shortages, though estimates go as low as 1.5 days.

This has been a factor among private sector gasoline station operators who entered the market as a result of the 2014 energy reform, driving up storage prices and making it more difficult to develop a competitive edge. 

“Mexico is an attractive country, has a growing middle class, and there’s an expected growth in [fuel] demand,” Rodríguez said.

The market, however, is filling quickly. Rodríguez added, “if you don’t have [storage] infrastructure, you can’t compete in the Mexican fuel market, if you don’t have it then you have no way to bring fuel into the country.” 

Expected storage coming online from the private sector

OPIS does not track capex for these projects.

Private maritime storage capacity is a response to growing demand, the need to remain competitive, and cheaper costs of around US$0.0077/l versus around US$0.051/l for terrestrial imports.

This advantage and demand are also reflected in the growth of maritime fuel imports, from 590,000b in December 2018 to 1.93Mb (million barrels) in December 2019.

PEMEX vs. PRIVATE

OPIS' Rodríguez said that in September 2019 Akron, BP, Chevron, ExxonMobil, Glencore, Gulf, Shell, Marathon, Repsol, Total and Windstar controlled 16.8% of the retail fuel market.

Their primary competitor is state-owned oil conglomerate Pemex, which controlled 69% of the diesel market and 86% of gasoline sales in December, according to OPIS.

In a memo to energy regulator CRE, Pemex said its share could drop to 45% under the current framework.

That memo was part of a “wish list” from state energy companies Pemex and power utility CFE to squeeze out the private sector by, for example, increasing transmission costs, limits on interconnection of solar and wind power, canceling self-supply contracts and undercut the benefits of clean energy certificates.

Pemex also sought the government’s support in efforts to ensure its dominance in the fuel sales market, and while the administration of President Andrés Manuel López Obrador has insisted it would not cancel the energy reform, it has shown willingness to curtail private participation through regulatory means.

Asked if private firms could meet the storage needs in the coming years, Rodríguez said only “if they are allowed to develop the infrastructure, that there are no regulatory challenges, which has been the problem.”

PROJECT PIPELINE

BNamericas’ project profile database lists five midstream storage projects under construction with capex of at least US$100mn:

Tuxpan storage and distribution terminal expansion 

This US$286mn Pemex owned and operated facility (pictured) is part of a hub of natural gas pipeline projects as a maritime fuel import and storage facility and is advancing toward full operational status. It comprises additional infrastructure at the Tuxpan terminal designed to meet growing gasoline demand from Mexico City.

Altamira, Tamaulipas maritime terminal

This US$230mn maritime terminal will allow fuel imports from the US with PANAMAX vessels. The facility will provide services for the receipt, storage and delivery of gasoline, diesel and turbosine, which will be transported by tank trucks. The terminal will provide access to Bajío region through the KCSM railway network. It is part of the Altamira-Bajío Petroleum Supply Network (SUPERA) of Avant Energy and is planned to be operational by December.

Topolobampo hydrocarbons terminal

Expected to be in operation at end-2020, the US$150mn terminal covers 116,144m2, of which 97,028m2 are on land and 19,116m2 are maritime surface. It will be a specialized terminal for the management and storage of hydrocarbons, petroleum, petrochemicals and other fluids.

IEnova Petrolíferos IV is the concessionaire/operator. It will build, manage and engineer the facility in the southwest area of Topolobampo port, Sinaloa state. Owner is Administración Portuaría Integral de Topolobampo.

Baja Refinados terminal

Currently awaiting a construction decision, this US$130mn IEnova project consists of the development, construction and operation of a marine terminal for the receipt, storage and delivery of hydrocarbons, mainly gasoline and diesel. The terminal will expand the supply options and improve logistics in the supply of refined products in Baja California. 

The terminal will be inside the La Jovita Energy Center, 23km north of Ensenada.

Coatzacoalcos hydrocarbons storage terminal

Located along the southern Veracruz state O&G hub, the US$100mn project consists of the construction, equipment and operation of a specialized facility for handling and storing hydrocarbons, petroleum, petrochemicals and other technically viable fluids; as well as the laying of pipelines toward the docks of the port. In addition, it considers providing maneuver port services for the transfer of goods or merchandise, such as loading, unloading, stacking, storage, stowage and haulage within the terminal.

High Level Energy is handling the construction, management and engineering of the project, which is owned by Administración Portuaria Integral de Coatzacoalcos. Construction reportedly began in January.