Aguascalientes is located 104 miles west of San Luis Potosi, 176 miles northwest of San Jose Iturbide and about 137 miles northeast of Guadalajara. Aguascalientes is the capital of the state of Aguascalientes, and it has a population of about 1 million people. It is noted that Watco is planning to build a rail terminal for oil products imports at San Luis Potosi, and Howard Energy Partners started up its oil products rail terminal at San Jose Iturbide in January.

Ferropuerto is expected to begin construction for this project in April, and the “early operation” or initial delivery of fuel into the heart of Mexico from Houston, Texas, is scheduled for November 2017.

Ferropuerto has already tied up products shipping agreements with some U.S. companies. PMI, the main oil products importer into Mexico, could also be a player at this location down the road. PMI is the trading arm of state-owned oil and gas firm Pemex.

The first phase of the project should see a maximum delivery capacity of about 220,000 b/d to Aguascalientes by early 2018. The terminal will cater to gasoline, diesel and liquefied petroleum gas. Unit trains could offload products onto tank trucks as well as storage tanks on site.

The new terminal is to have a total products storage capacity of 130,000 bbl, including two 23,000-bbl tanks and two 42,000-bbl tanks.

Sources said that each unit train could deliver up to 150 tank cars of fuel. Besides oil products, the Aguascalientes terminal will also receive containers.

Ultimately, Ferropuerto has plans to increase the terminal’s fuel handling capacity to as high as 1 million b/d in 2020. The actual timetable for expansion will depend on market requirements and customers’ demand.

Sources said that this Aguascalientes project is already approved by the Comision Reguladora de Energia, Secretaria de Energia, Agencia de Seguridad, Energia y Ambiente and Instituto Mexicano del Petroleo.

OPIS notes that Mexican energy reform has triggered a wave of high interest among Mexican and U.S. companies to build infrastructure in Mexico to facilitate more fuel imports and possibly lower the Mexican government’s financial burdens linked to domestic fuel price subsidies.

As seen with past hot market trends such as building out storage capacities in Cushing, Okla., and constructing new condensate splitters, not all projects will materialize due to strong market competition and project funding. The first few projects to get off the ground appear to have better economic advantages than those which are stuck in planning stages. Each regional market requirements for fuel imports and infrastructure could be saturated by new projects.

Also, new fuel import players will need to compete for market shares in Mexico with the current dominating player, Pemex, which is supported by its refinery production and imports. New players are expected to target niche markets in Northern Mexico and Central Mexico, where Pemex is not supplying fuel efficiently. These markets experience some supply shortages as a result of Pemex’s inability to deliver products to these areas consistently due to limited supplies and high logistics costs.

Mexico City is also a hot market for new players because of its large metropolitan fuel demand, but Pemex is expected to step up price and supply competition to protect its market share.