Mexico’s Comision Reguladora de Energia (CRE) has approved the proposal of procedure of open season to Pemex Logistica, as well as the terms and conditions for the service of storage and transportation by pipelines.

CRE said the open season, which allows third-party shippers to ship and store products on Pemex’s logistics system, will increase efficiency in the Mexican oil industry and provide greater certainty to importers and marketers. The opening of Pemex’s midstream system to third-party shippers is in line with the legal provisions established by Mexican energy reforms.

OPIS notes that Pemex pipelines and storage systems are currently closed to third parties. Pemex continues to have the monopoly of the Mexican oil products market despite an import liberalization earlier this year. The slow import flow by private companies so far this year is blamed on logistics constraints and fuel specifications issues. Mexico is one of the largest U.S. oil products export destinations in terms of volumes, and this north-south flow has increased in the past year due to nagging Mexican refinery issues.

While an opening for Pemex pipelines and terminals to third parties should increase private fuel imports in February, OPIS notes that CRE will continue to control the prices in the northern region of Mexico during the first four months of 2017. A price control may not offer much price discovery for third parties planning to import fuel into Mexico, but after April, fuel prices in northern Mexico will be allowed to float without CRE intervention.

The opening of Pemex systems will be implemented in two phases.

In the first phase, Pemex will make available about 267,000 b/d of pipeline capacity and around 959,000 bbl in storage capacity in northern Mexico. In accordance with the schedule of gasoline and diesel price flexibility to be established by CRE, the open seasons will be carried out by region.

The first will be in the northern zone of the country, and will include storage terminals and pipeline systems in the border states of Baja California, Sonora, Chihuahua, Coahuila, Nuevo Leon and Tamaulipas.

OPIS notes that the first phase could allow independent importers in Mexico to buy fuel from rack terminals in California, Arizona and New Mexico for delivery on the Pemex system. The second phase would expand U.S. rack optionality for northern Mexico retailers and distributors to Texas, including Brownsville and El Paso.

The first phase of the Pemex Logistics open season will begin Feb. 1 and will end on April 30, with storage and pipeline infrastructure in Baja California, Sonora, Chihuahua, Coahuila, Nuevo Leon and Tamaulipas.

The first phase will cover storage terminals in Rosarito, Mexicali and Ensenada in Baja California. Terminals link to the Rosarito pipeline transportation system. The first phase will also cover terminals in Nogales, Magdalena, Hermosillo, Guaymas, Ciudad Obregon and Navojoa as well as terminals linked to the Guaymas pipeline transportation system.

CRE will launch an electronic platform to offer technical, operational and financial information and data on Pemex Logistica, and this is made available to interested third parties, CRE said.

CRE will also find a prequalification format for interested parties and an auction platform to receive the shipping and storage proposals.

In the current context of the free importation of petroleum products and the acceleration of the floating price mechanism or price liberalization for gasoline and diesel under market conditions, these procedures provide the basis for open and not unduly discriminatory access to the infrastructure of transport by pipeline and storage property of Pemex.

The second phase will kick off April 30. Third-party independent players will have access to terminals in Ciudad Juarez, Chihuahua, Parral, Gomez Palacio, Sabinas, Monclova, Saltillo, Nuevo Laredo, Santa Catarina, Cadereyta, Ciudad Mante, Reynosa, Ciudad Victoria and Madero.

The second phase will also cover terminals linked to the North Duct transport system.