Work starts on Valero Energy's US$250mn fuels hub in Mexico

Construction on the Altamira fuel storage and distribution terminal began on Thursday, as confirmed by David Maya Soto, CFO of project operator OTM Mexplus Puertos, in an interview with BNamericas.

Grupo México subsidiary GMSI will carry out all construction as the sole contractor on the project, said Maya, with work expected to conclude around mid-2023.

The start of works marks an important advance within US refiner Valero Energy’s US$1bn plan to develop a distribution and storage network spanning much of the country. 

Working with Valero, which bills itself as the world’s largest global independent refiner, Maya said, “The idea is to develop a distribution network using our OTM liquids terminal in Altamira as a hub.”  

“With two maritime ports, in Altamira and Veracruz, Valero will be able to supply fuels to all seven planned terrestrial sites, for an investment of approximately US$1bn.”

The executive told BNamericas that financing for the project concluded in June through a US$200mn syndicated loan backed by Japan’s Sumitomo Mitsui Banking Corporation (SMBC), with support from German Investment Corporation DEG, a subsidiary of KfW.

The loan covers the project’s expected capex of US$150mn in addition to VAT and financing costs, said Maya.

He added that the total investment also entails Mexplus’ US$50mn equity stake in the project, representing its contribution to the construction and of docking facilities, located in Tamaulipas state, approximately 480km from the US border at Matamoros on the Gulf of Mexico.

For Mexico, “This represents the largest investment ever by a wide margin for private fuels distribution infrastructure,” said Maya, adding it is the biggest investment since private firms began to enter the market following the 2013-14 energy reforms.