Spotlight: Mexico's Hydrocarbons Storage Project Pipeline
09.13.2021 - NEWS

September 13, 2021 [bnamericas] – Mexico’s need for greater hydrocarbon storage is rapidly growing with an expanding fuel sales network, increased O&G trade at key Gulf of Mexico ports and the president’s drive to boost refining in the country.

In addition to six projects (with capex of more than US$50mn) currently at the pre-construction or construction stage, the BNamericas project database is tracking seven storage projects currently in early works, and more projects will be added to the pipeline in the short or medium term.

For example, CFEnergía, the gas and fuels sales subsidiary of state-owned power utility CFE, reportedly met last week with private investors to gauge interest in building a new liquefaction and storage project in Oaxaca state that would potentially allow it to export gas derived from import contracts with US providers that exceed its current consumption.

According to the report, the new floating natural gas liquefaction (FLNG) terminal would process 430Mf3/d (million cubic feet per day), with the possibility of expansion up to 1Bf3/d, for a total investment of between US$1bn and US$2bn.

The terminal would be located at the southern end of the to-be-tendered Jáltipan-Salina Cruz pipeline facing the Pacific Ocean. This pipeline is itself one of the components of the current administration’s broader Tehuantepec Isthmus rail, gas, and highway corridor project, connected to Gulf of Mexico assets and gas pipeline infrastructure leading back up north to the US, west to central Mexico and east to the Yucatán Peninsula.

The start of operations is expected for 2024 and the project would be built under a public-private partnership.

According to CFEnergía, it imports 8Mf3/d of gas from the US, but only ends up using 4.6Mf3/d to power its thermal plants and fulfill its own supply contracts. And it expects to still have excess supply once six new combined cycle units it is tendering come online over the next half decade.

Other projects are expected to be rolled out as part of Mexico’s national infrastructure plan (PNI), with 22 port projects listed in the updated first round of the PNI (January 2020) amounting to 73.7bn pesos in investments (US$3.7bn).

Only a handful of those projects surpass US$50mn in capex and are therefore included in the project database, and the government has provided precious little details on some of the listed PNI projects that BNamericas has begun tracking.

That said, the following listing spotlights those seven hydrocarbons storage projects in early works tracked in the project database.

The first batch of projects are centered at the Gulf of Mexico port of Tuxpan in Veracruz state, currently a magnet for investment, with more than US$1bn in projects slated in the short-term.

Caoba project; Tuxpan, Veracruz
Capex:
US$800mn, construction decision pending
Owners: Sierra Oil and Gas, TC Energía México, Grupo TMM

The project involves building a marine terminal in Tuxpan and linking it to the Tuxpan-Tula refined products pipeline, connecting the Gulf coast to the distribution hub at Tula in central Mexico. However, no news has emerged since January 2019, when the owners were said to be awaiting a construction permit.

Petroleum storage terminal (formerly the Sirius Tuxpan-Hidalgo terminal system); Tuxpan, Veracruz, Mexico
Capex: 16.5bn pesos (US$825mn)
Owners: Catán Energía; Basic engineering (FEED): Inelectra

Diana Portilla, head of the maritime port strategic planning unit at Mexico’s general coordination department of ports and merchant marine in the communications and transport ministry (SCT), told BNamericas in February that the project is now titled Sistema de Terminals Sirius Tuxpan-Hidalgo, where the owner/operator Sirius is running the project, listed for tax purposes as Catán Energía.

The project entails the development of a terminal system (Catán Energía Terminales) with the construction of a new port on the south side of the Pantepec River in Tuxpan, Veracruz, as well as a nearby storage terminal facility.

The terminal has a planned area of nearly 3,600m2 and an installed capacity of 900,000b. As of January 2020 revision of the PNI, the project is slated to be completed in 2023-2024.

Tuxpan gas terminal; Tuxpan, Veracruz
Capex: Not disclosed; Stage: Early design and engineering
Owner: Enermex Logística y Terminales

The project involves building a 350,000b gasoline terminal. It is one of a raft of projects in Enermex’s pipeline with collective capex estimated at US$500mn.

In a pre-pandemic interview with S&P Global Platts, Enermex commercial manager Francisco Chávez said that in addition to the Tuxpan gasoline terminal, the company also has plans to open a facility in Mexico state with initial capacity of 250,000b, ramping up to 1Mb, as well as a facility in Guadalajara (listed below) and a third project in Tabasco state, next to the Dos Bocas refinery.

In 2022, Enermex plans to begin operations in three more locations – Manzanillo, Aguascalientes and Salina Cruz, Chávez said.

Tuxpan oil storage; Tuxpan, Veracruz
Capex: Not disclosed; Stage: Awaiting construction decision
Owner: Glencore

The project involves the construction of an oil storage terminal with capacity of 1.5Mb to import oil into Mexico. it is expected to configure closely with the retail fuel sales network operated by the Mexico-based group G500.

The status of the project remains as awaiting a construction decision, with the latest info on the project outlining a delay in construction until 3Q20, as reported in November 2018 by S&P Global Platts.

Reasons were not given at that time and regulatory permitting may yet be ongoing. However, efforts made by the BNamericas projects team to reach out to the owner in the last few months to determine any advances on the terminal have yet to receive any response.

Manzanillo refined products terminal; Manzanillo, Colima
Capex: US$320mn; Stage: Awaiting construction decision
Owner: TP Terminals; Concessionaire/operator: IEnova

The storage system is designed to carry out the reception, storage and delivery activities of petroleum products and other fuels, such as premium and regular gasoline, diesel, jet fuel, Avgas, fuel oil, diluent (cutter), ethanol and MTBE.

Hit by delays because of the pandemic, this project is awaiting the start of construction with advanced engineering and design is now underway. Currently, there is no defined date for the start of commercial operations.

In April, the project’s capacity was increased to ~2.3Mb, causing capex increase to US$320mn, as announced by Tania Ortiz, CEO of IEnova, at the 1Q21 investors call.

Sirius Lázaro Cárdenas maritime terminal; Lázaro Cárdenas, Michoacán
Capex: 2.4bn pesos (US$120mn); Stage: Early design & engineering
Owner: Sirius

Lázaro Cárdenas is one of the most actively growing ports in the country and this hydrocarbons storage projects is slated in the PNI as to be completed in 2023-2024.

Beyond the Sirius project, there are three federal fuels storage and handling projects under the supervision of the Lázaro Cárdenas port authority (API).

As listed in the PNI, the API projects entail 629mn pesos for expansion of fuel handling capability, 412mn pesos for fuel handling upgrades and 810mn pesos for fuel transportation, with works slated for completion in 2020 in the January 2020 document.

Many PNI projects, and projects in general, saw major delays and postponements with the pandemic, and a new update on the national infrastructure plan is expected in the coming weeks, having been delayed since July.

Guadalajara gasoline terminal; Guadalajara, Jalisco
Capex: Not disclosed
; Stage: Early design & engineering
Owner/operator:
Enermex Logística y Terminales

Part of Enermex’s US$500mn bundle of storage projects, this project involves the construction of a gasoline terminal with capacity of 600,000b to feed demand in one of Mexico’s largest and fastest growing markets.

VALERO NETWORK

Other storage projects in development include those in the pipeline tied to US refiner Valero’s US$1bn storage and distribution network strategy, also entailing a wide range of partners.

Veracruz  

This section of the network comprises a maritime reception and storage terminal in the port city of Veracruz.

The US$300mn terminal (pictured) was built by Sempra Energy subsidiary IEnova and entered operations at the end of 2020. It has storage capacity of 2Mb.

Altamira

Construction of this US$150mn storage and distribution terminal in Altamira port, Tamaulipas state, started on September 8, as BNamericas reported previously.

Works are expected to conclude in mid-2023. The facility will have a capacity of 1.1Mb.

Guadalajara and Monterrey

These two terminals in Jalisco and Nuevo León states are being built by Grupo México.

Both are expected to come online this year and require combined investments of US$230mn.

While the Monterrey terminal will store 450,000b, with an option to expand capacity to 560,000b, the Guadalajara terminal will initially store 900,000b, with an option to expand to 1.35Mb.

Aguascalientes

A US$20mn storage terminal is being built by Grupo México in the municipality of San Francisco de los Romo.

The terminal, which will have capacity to store 140,000b, is expected to come online in the first quarter of 2022.

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