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New fuel storage to top 2.4mn bl in Mexico

08 May 2018 20:11 (+01:00 GMT)
New fuel storage to top 2.4mn bl in Mexico

Mexico City, 8 May (Argus) — Four new fuel storage projects with a combined capacity of 2.4mn bl will come online in Mexico's recently liberalized fuel market this year, deputy energy minister Aldo Flores said today at the Argus Mexico Fuel Markets Summit in Mexico City.

The projects include local brand Gas Natural del Noreste's 1mn bl storage in northern Nuevo Leon, Hidrocarburos del Sureste's 450,000 bl terminal in Yucatan, and two projects in Veracruz — Glencore's 600,000 bl facility and Vopak's 431,000 bl site.

Over the next two to five years a total of 48 midstream projects are expected to add up to 30mn bl of storage capacity through $4.6bn in investments from 33 companies, Flores said. These include projects that have either asked for permitting, received permits or are under construction.

Prior to Mexico's fuel market liberalization only Pemex could supply the country with fuels, but private companies can now participate and must comply with minimum storage capacity policies.

"We are building a storage system for the 21st century, because a storage system that could only hold three days worth of sales was not enough," Flores said. "But now, with the new minimum storage policy we will increase our storage capacity to 13 days worth of sales by 2025, which is vital to guarantee energy security."

Flores said local fuel production and US imports will have to compliment each other as Pemex's domestic refining capacity — even when in good operating condition — will not be enough. From 2000-2017 refined products imports in Mexico have grown 12pc annually on average, while demand has grown 2.6pc and production fallen by 2.6pc annually. Diesel imports grew 14pc annually and jet fuel imports grew by 15pc annually.

Koch, Andeavor, and ExxonMobil are importing on a regular basis, but 96 companies have imported at least once since the energy reform was enacted in 2014. Before the reform only Pemex was allowed to import fuels or refined products into Mexico.