Mexican distributor Hipergas fuels jets by rail

: Oil products
19/08/29

Mexican fuel distributor Hipergas imported its first cargoes of jet fuel by rail this month from the US into Monterrey, Mexico, as the market for this refined product gradually opens after decades of government monopoly.

Juarez, Mexico-based Hipergas mostly imports and distributes LPG, gasoline and diesel, and has previously imported jet fuel by tank truck to supply Mexican airline Viva Aerobus.

"But we saw a new opportunity in the market" for jet fuel by rail, Hipergas chief executive Mario Fuentes told Argus.

Jet was the last fuel market to open to competition after the 2014 energy reform, which ended state-run airport service company ASA's monopoly. Mexico consumes more than 80,000 b/d of jet fuel, but has some of the highest prices in the region. Pipeline capacity is constrained, creating demand for other forms of transportation.

So Hipergas moved the first of 28 railcars loaded with 28,500 USG each into Monterrey from its two, 30,000 bl storage tanks in Brownsville, Texas, the week of 12 August. The fuel is destined for airports in Monterrey as well as Matamoros and Reynosa, Mexico, Fuentes said.

Offloading continues, as paperwork and permitting have taken extra time, Fuentes said. It is the first instance of jet fuel being imported to Mexico by rail, to Fuentes' knowledge.

Authorities "have been accessible but are curious about why we decided to … change logistics that have been around forever," he said. "We still have to fine tune regulations and processing."

The company hopes to import 15-18 railcars of jet fuel each week for the same region. The company's product is comingled in storage tanks at the regional airports, where ASA recently opened storage access to outside companies.

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