Tania Ortiz, Director General, IEnova
IEnova is committed to developing Mexico’s energy infrastructure to enhance its energy reliability, that is critical for its economic development.
What is your outlook of the energy market in the country, and what are the main opportunities when it comes to power infrastructure?
Every crisis comes with lessons to learn and opportunities. The power crisis in Texas taught Mexico many lessons as our country is closely linked to the US. The first lesson is that it is extremely important to have a diversified energy base. Mexico is fortunate to have access to abundant and cheap natural gas from the US, but we need to diversify our energy matrix. That can be achieved primarily by developing Mexico’s renewable resources. We should continue to develop Mexico’s wind and solar resources which will also strengthen Mexico’s energy security. Second, continuing to strengthen Mexico’s power transmission infrastructure is also critical to avoid future interruptions. Third, we need to think about storage, primarily natural gas. Mexico has three large LNG facilities, but those tanks are not intended to provide storage. Mexico needs to develop underground natural gas storage for much needed backup. Diversifying the energy base, investing in transmission, and developing underground natural gas storage are the three lessons learned from the situation in Texas. Although each of these opportunities is different, there is always room for private investment to play into these different opportunities.
What challenges did you face when developing the large terminal project of Puerto de Veracruz?
It is an exciting project because it is our first refined fuels terminal in Mexico, and we can store about 2 million barrels of gasoline, diesel, jet fuel, and MTBE. This will be the largest private terminal in the Gulf coast of Mexico with immediate access to the production of the US Gulf coast refineries, with less than two days of shipping into Veracruz. This terminal has many advantages and provides efficiencies, including the fact that it provides access by rail to Mexico City and Puebla; hence, we are also about to begin operations of two additional terminals in Mexico City and Puebla. We will bring the product in rail cars in order to discharge it into trucks that go to the final distribution facilities. It is a wonderful opportunity; it has been challenging because it is one of the first private refined products terminals in Mexico. I am pleased to say that throughout the project development there was great cooperation from the port authorities, Veracruz API in particular, the state and federal governments. We have an important customer, Valero, the largest independent refiner in the US, that is committed to long-term fuel supply in Mexico.
What does the project mean for energy security?
Mexico is a net importer of fuels, particularly gasoline. Some 70-80% of its gasoline consumption is imported. We have access to competitive gasoline being produced in the US, and this facility enhances Mexico’s energy security by not only supplying a new port of entry into Mexico but also providing storage and inventories.
What have been the main advancements in the Costa Azul project?
This is our most important project under development in Mexico today. The Energía Costa Azul project was originally developed as an import and regasification facility, and now due to the change in the market, where North America is a large exporter of natural gas, we decided to convert that facility, which was operating for over 10 years, into an export facility. We will take gas from the US, liquefy it, and export it primarily to Asian markets. We spent several years developing the project, and last November we took a final investment decision, obtaining all the necessary approvals to launch the construction. The total investment is USD2 billion, which we will undertake with our partners Sempra and Total. Additionally, we will invest USD350 million in a new gas pipeline to bring natural gas from the US into the facility.