September 14, 2018 [Nasdaq] - Sempra Energy SRE has announced that its Mexican subsidiary - Infrastructures Energética Nova, S.A.B. de C.V. (IEnova) - has secured a long-term contract from the British Petroleum BP for the construction of the Baja Refinados liquid fuels marine terminal in Baja California, Mexico.
Sempra Energy’s IEnova will develop a liquid fuels marine terminal with an expected investment of approximately $130 million. The liquid fuels terminal will have an initial storage capacity of 1 million barrels of gasoline and diesel.
The company expects to commence operations in the second half of 2020. IEnova will conduct the entire development process of this terminal that includes engineering, procurement and construction as well as providing financing services. It will also supervise the work related to operations and maintenance.
British Petroleum has a long-term contract with the company for use of the remaining 50% of the storage capacity, while the first 50% of the capacity has been booked by Chevron Combustibles de México S. de R.L. de C.V.
Sempra Mexico’s Energy Outlook
Per a report published by the International Energy Agency, Mexico’s total energy demand is expected to increase approximately 20% by 2040 from 2016’s level, with increasing dominance of liquid fuels in power generations.
This reflects solid growth prospects of the energy sector in Mexico, with liquid fuels at the center. This has set the stage for energy services providers like Sempra Energy to expand its footprint in the country by constructing new liquid fuels projects like the latest one.
Impressively, with Mexico opening up its energy sector to private investment in 2014, IEnova has invested more than $7.6 billion in assets and ranks among the largest energy companies in the country. In liquid fuels market, which has a value of $10 billion, the company is increasingly engaging in construction of fuel terminals.
For instance, in April 2018, IEnova announced that it will construct a marine liquid fuels terminal worth $130 million at the Baja California, Mexico. In sync with this, IEnova has also secured a $150 million contract for liquid fuels project from the Topolobampo Port Administration in Mexico.
Per the terms of the agreement, IEnova will construct and operate a marine liquid fuels terminal in Sinaloa. Per the contract, the first phase terminal will have a storage capacity of 1 million barrels of fuel, including gasoline and diesel and the company anticipates the operations to commence in the fourth quarter of 2020.
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