Marathon Petroleum Signs Offtake Agreement for IEnova's Manzanillo Terminal in Mexico
07.01.2019 - NEWS

June 1, 2019 [S&P Global Platts] – Marathon Petroleum signed an offtake agreement for IEnova’s new Manzanillo marine terminal in Mexico’s Pacific coast, the companies said Tuesday.

 
The terminal gives Marathon a logistic point to supply the greater Guadalajara metropolitan region, Mexico’s second largest fuel market. Western Mexico, where Guadalajara is located, consumes about 150,000 b/d of gasoline and 75,000 b/d of diesel, government data revealed.

The US refiner will have access to 650,000 barrels of storage capacity at the terminal. This is the third new marine terminal Marathon has contracted in Mexico’s Pacific Coast.

The company has partnered with CFEnergia to reconfigure a 660,000 b/d fuel oil terminal at Rosarito in Baja California state. Last year, it also contracted 1 million barrel of storage capacity at IEnova’s marine terminal at Topolobampo in Sinaloa state.

Marathon operates four refineries in the US Pacific coast with a combined capacity of 790,000 b/d. These are located in Anacortes, Washington; Kenai, Alaska; and Martinez and Los Angeles in California. As a result of the terminals, Marathon will be able to double its fuel imports into Mexico to 30,000 b/d by the end of 2020, a company executive previously told S&P Global Platts.

Lack of infrastructure has been a significant obstacle for new fuel wholesalers entering Mexico’s liberalizing fuel market to compete against Pemex.

Private companies imported 63,500 b/d of gasoline and 101,800 b/d of diesel in May, government data showed. This represents a share of total imports of 10% for gasoline and 30% of diesel, the same share since February.

As a result of this new agreement, IEnova will expand the capacity of its Manzanillo terminal by 30% to 2.2 million barrels, the company said. Currently, BP and Trafigura have contracted the remaining capacity of the terminal.

The facility is expected to begin operating on the first quarter of 2021, pending regulatory approval times, IEnova said. In addition to Trafigura and BP, majors Repsol, Total and ExxonMobil have contracted rail terminals to supply Western Mexico.

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