Northwest Mexico fuel stocks outpace Gulf

Mexico's northwest region has edged out the Gulf as the zone with the highest gasoline stocks in the country, newly developed weekly stats from the ministry of energy (Sener) show.

In the week ended 21 September, the northwest reported 1.212mn bl of gasoline stocks, while the Gulf was at 998,000 bl. In 2017 the regions were close to parity — gasoline stocks in the northwest region averaged 987,000 bl, while stocks averaged 929,000 bl in the Gulf. Yet on average in 2016, the Gulf region had about 30pc more gasoline in stock than the northwest.

Nationwide, the energy minister reported that during the same 38th week of the year, gasoline stock levels rose to 4.2mn bl, more than the 3.6mn bl average of the year through 21 September.

Diesel stocks followed the same pattern. In the same week, the northwest had 750,000 bl of diesel, while the Gulf had 330,000 bl. Annual stocks for the Gulf averaged 429,000 bl, while the northwest levels were at 678,000 bl so far this year.

Nationwide stock levels in diesel stood at 2.501mn bl in the week ended 21 September and 2.248mn bl for the annual average, almost flat with the 2017 average of 2.251mn bl.

Private sector investment in the midstream sector has likely contributed to the slight shift in stock concentrations.

"The first surprise is clearly the investment levels in the northwest as Baja California and Sonora are clearly much more smaller markets than the central Mexico City, supplied by the Gulf region," said Luis Miguel Labardini, an analyst with Marcos y Asociados energy consulting firm. "The second surprise is that companies keep investing despite the uncertainty in the political panorama."

Mexico's Gulf coast — with its proximity to the US Gulf coast — has traditionally been the center of Mexico's refined products value chain.

The Gulf region in Mexico, which comprises the states of Veracruz and Tabasco, received 29pc of the gasoline imports in August, or 90,300 b/d, while Mexico's northwest region, conformed by Nayarit, Sinaloa, Sonora, Baja California, and Baja California Sur states, received only 7pc, or 21,795 b/d of the gasoline imports in the same month.

Nevertheless, the northwest is developing as a storage center as refineries in the western US eye Mexico's market.

US-based Sempra's Mexican subsidiary IEnova is building two terminals in the region in which BP and Chevron have already reserved capacity.

Andeavor, the only winner so far in Pemex's fuel open seasons, won the rights to close to 110,000 bl of storage and 3,000 b/d of pipeline capacity in Baja California Sur and Sinaloa in July. It secured 315,000 bl of storage and just over 9,500 b/d of pipeline capacity in Sonora and Baja California in a first sale in May last year, and is building its own terminal in the same area.

Philipps 66 opened its first fuel retail stations also in the Northwest, while Repsol officials in Mexico said they plan to expand to the same region.