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Valero exploring Mexican product supply

15 Jun 2017, 4.49 pm GMT

Valero exploring Mexican product supply

Houston, 15 June (Argus) — US refiner Valero has pitched distributing products by rail from Mexico's east coast to central states, according to marketing materials seen by Argus.

The company confirmed meeting with potential clients but declined to comment on the specifics of the proposal.

"The plans are in the works and continue to evolve as we hone our strategy to further serve the Mexico market," the company said.

Valero is already a regular exporter of products to Mexico, but the plans under consideration would push Valero's supply further inland using rail.

The Valero materials outline 950,000 bl of gasoline and diesel storage at Altamira, Tamaulipas, connected to rail facilities and with docking priority at a berth suitable for vessels up to Aframax size. A Monterrey, Nuevo Leon, terminal with 325,000 bl of gasoline and diesel storage would receive 100-car unit trains.

A San Luis Potosi terminal with 325,000 bl of storage balanced for more gasoline than diesel would accept 45-car trains from Altamira but be capable of taking three 100-car unit trains.

A map in the Valero materials marks southern and western Mexico as "phase 2" with no further details. It also highlights Valero Energy Partners' McKee products pipeline connecting the 195,000 b/d McKee, Texas, refinery to El Paso, Texas, as well as a pipeline to the border city of Laredo from Valero's 95,000 b/d refinery in Three Rivers, Texas.

Valero joins BP, ExxonMobil and fellow US independent refiner Tesoro exploring the liberalized Mexican downstream market.

"I think everyone is going to be looking at Mexico as a growth opportunity, and it's certainly something very logical for us to pursue," Valero chief executive Joe Gorder said in late April. "Not only Mexico but other Latin American countries, also."

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