Mexican energy reform: Monterra del Centro is first private refined products pipeline

Mexican government’s energy industry reforms attracting private capital for energy infrastructure projects like Monterra del Centro pipeline

Monterra

Monterra Energy CEO Arturo Vivar

MEXICO CITY – A major Mexican energy infrastructure project will take a big step forward this summer, as the Monterra del Centro pipeline project begins the regulatory approval process, says Monterra Energy, the project proponent.

The project consists of of four independent assets: (i) a port facility to receive product, (ii) a 1.2 million barrel marine receiving terminal at Tuxpan, Veracruz, (iii) a 270 km pipeline into central Mexico, and (iv) a 600,000 barrel offloading terminal near Tula, Hidalgo, all with state of the art measurement, SCADA and leak detection technology, according to a Monterra Energy press release.

The company says that it has secured preferred, priority, 24/7/365 access to an existing 200 meter dock along the Pantepec River, which runs through the northern part of the state of Peubla and eventually becones the Rio Tuxpan in Veracruz, emptying into the Gulf of Mexico northeast of Mexico City.

The dock possesses an existing liquids hydrocarbon permit, making Monterra the only private company at present to control a facility with an existing permit at Tuxpan.

The sheltered location along the river provides a strategic advantage to Monterra’s clients due to the possibility of significant and frequent weather delays at the current open water import locations in the Gulf of Mexico.

“With exclusive access to over 30 hectares of land at Tuxpan, a port facility with a hydrocarbon liquids permit, land near Tula, and 270 kilometers of pipeline right of way in-place, we are well positioned to develop the first private refined products pipeline made possible by the Mexican government’s energy reform,” said Monterra CEO Arturo Vivar.

Monterra successfully launched the first CRE approved Open Season for the pipeline portion of the Tuxpan to Tula refined products system on June 1st.

To date, Monterra has received interest in excess of 100,000 boe/d of clean fuels including diesel, gasoline and jet fuel from both Mexican and international groups.

In response to demand from key shippers in the market, Monterra has developed a competitive market rate for system access and use, as compared with other logistics alternatives.

“We are pleased to be working with Mexican gasoline station groups as well as leading international traders and refiners to bring this project to fruition. These relationships will allow us to provide the best solution in an increasingly competitive market,” said Monterra’s President Michael A. Williams.

“We look forward to working closely with Pemex to ensure connectivity to existing infrastructure so that the addition of this new pipeline provides Mexico and its citizens with the infrastructure the country requires to support forecasted growth.”

In parallel, Monterra has agreed to indicative terms with multiple anchor clients both in Mexico and internationally that in aggregate represent sufficient demand to advance the project to the next stage.

Over the coming weeks, Monterra will be working with clients to execute final documents and design each asset to the capacity and size required by the market.

“Mexico´s economic development is heavily dependent on competitive infrastructure for hydrocarbon products. Many industrial and commercial sectors across the country require reliable access to infrastructure in order to achieve their full potential and successfully compete both in Mexico and in the international markets,” said Monterra CEO Arturo Vivar.

“We are certain that the steps we have announced today contribute toward this goal and, therefore, we take great pride in announcing these important steps in our Tuxpan project.”

The formal permitting procedure with CRE and other regulatory bodies is expected to start this summer.

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