Exxon jumps head­long into Mex­ico fuel mar­ket

In­creas­ing number of for­eign firms to in­vest in ports ter­mi­nals, fuel stor­age fa­cil­i­ties

Gulf News - - International -

ExxonMo­bil Corp. is join­ing Chevron Corp. and other US re­fin­ers to sup­ply the newly free Mex­i­can fuel mar­ket.

Exxon sent two car­goes to­talling 120,000 bar­rel of diesel and gaso­line Wed­nes­day from its re­fin­ery in Beau­mont, Texas, to a pri­vate ter­mi­nal in San Luis Po­tosi. The com­pany is mov­ing car­goes along Kansas City South­ern Rail­way Co.’s net­work and plans to utilise the San Jose Itur­bide ter­mi­nal in Gua­na­ju­ato state, which is be­ing ex­panded, to bring in more sup­plies. Even­tu­ally, it aims to move prod­uct from all of its re­finer­ies along the Gulf Coast.

“ExxonMo­bil is the first com­pany to com­pete in the Mex­i­can fuel mar­ket in an in­te­grated ExxonMo­bil also in­di­cated Wed­nes­day that it will open 50 ser­vice sta­tions by the end of first quar­ter and in­vest more than $300 mil­lion in Mex­ico’s en­ergy sec­tor. Ri­vas added that an­other cargo will ar­rive at San Luis Po­tosi with around 60,000 bar­rels of fuels.

Exxon could use Pe­mex pipe­lines or other fa­cil­i­ties, and will also con­sider adding pipe­lines and more ter­mi­nals than the two it has al­ready an­nounced, Ri­vas said.

Last week, Chevron said it will bring prod­ucts from its Cal­i­for­nia re­fin­ing sys­tem to Mex­ico to sup­ply its gas sta­tions once the in­fra­struc­ture be­comes avail­able. Koch Sup­ply and Trad­ing Mex­ico is ship­ping diesel by tanker from the US to the port of Ver­acruz on Mex­ico’s East coast. form,” Carlos Ri­vas, gen­eral di­rec­tor of fuel for the com­pany in Mex­ico, said Wed­nes­day in a phone in­ter­view.

Rush to in­vest

An in­creas­ing number of for­eign firms plan to in­vest in ports ter­mi­nals, fuel-stor­age fa­cil­i­ties and other lo­gis­tics in­fra­struc­ture to com­pete with state-owned Petroleos Mex­i­canos, the coun­try’s pri­mary fuel ven­dor and dis­trib­u­tor. After years of prepa­ra­tion, last week Mex­ico fin­ished lib­er­al­is­ing prices for gaso­line and diesel across the na­tion.

Mex­ico is aim­ing to boost its fuel-in­ven­tory ca­pac­ity to 30 days worth, in line with an in­ter­na­tional rec­om­men­da­tion for 36, En­ergy Min­is­ter Pe­dro Joaquin Cold­well said Wed­nes­day in Gua­na­ju­ato, Mex­ico.

“US Gulf re­finer­ies have seen in­creas­ing util­i­sa­tion rates, they are cheaper and more ef­fi­cient than they were pre­vi­ously and they have abun­dant sup­ply for the Mex­i­can mar­ket,” said Ale­jan­dra Leon, Latin Amer­ica up­stream di­rec­tor at IHS in Mex­ico City. More pri­vate in­fra­struc­ture projects would be ready in the next sev­eral years, mak­ing it eas­ier for pri­vate com­pa­nies to im­port fuel without go­ing through Pe­mex, she added.

Rail shipments

Kansas City South­ern, which han­dled ExxonMo­bil’s diesel and gaso­line cargo, said in Novem­ber that it was seek­ing an agree­ment Pe­mex’s trad­ing arm PMI to im­port US fuels via rail into its San Luis Po­tosi ter­mi­nal. Pe­mex would then trans­port fuels via pipe­line to sup­ply the Mex­ico City area.

Im­ports ac­counted for al­most 74 per cent of Mex­ico’s gaso­line and diesel sales in Oc­to­ber as Pe­mex’s 6 re­finer­ies op­er­ated at their low­est vol­ume in nearly 27 years be­cause of stop­pages, dis­rup­tions and main­te­nance.

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