Nuevo León sees US$1.7bn in energy investment

Northern Mexico's Nuevo León state has seen US$1.7bn in investment pour into the energy sector this year, including wind farms and fuel storage and natural gas distribution infrastructure, according to the local government.

Six energy projects are under development in the state, Nuevo León's economy and labor secretary, Fernando Turner Dávila, was quoted as saying by government news agency Notimex. He was speaking during the opening of the first service station in the state operated by BP, in collaboration with Petrum.

The projects include the Frontera Norte Dos Águilas multipurpose pipeline, which will run from Corpus Christi in Texas to Santa Catarina in Nuevo León. It will include four storage terminals and a pipeline for natural gas distribution, and a gasoline and diesel storage depot being developed by Bulkmatic de México in Salinas Victoria, with investment of approximately US$427mn, construction of which was announced in January.

The terminals will have capacity to store 720,000b of gasoline, equivalent to 10 days of consumption in state capital Monterrey, and are due to begin operations in 1Q18, aiding Mexico's aim to increase fuel storage capacity. The project will increase gasoline imports from Texas and help reduce Mexican fuel prices, Bulkmatik de México's president Francisco Soto said at the time.

In addition, Enel Green Power will build the 244MW Dolores wind farm in the state after the Italian company was awarded an electricity supply contract in Mexico's third power auction in November. The farm is expected to start operations in 1Q20.

The energy sector and automotive industry together account for 35% of foreign direct investment in the state this year, Turner Dávila was quoted as saying.

In November, representatives of Finnish energy and technology companies visited the state to seek strategic alliances and explore investment opportunities, the government said at the time.

The investment in energy projects will offset the postponed investment in major infrastructure projects in the state due to a federal government 2018 budget shortfall. Those projects include construction of the 2.1bn-peso (around US$110mn) La Gloria-Colombia highway, the 4.4bn-peso Libertad dam and a 70.5mn-peso initiative to carry out pre-investment studies for the development of a rail project.

As the finance ministry did not approve the projects they are not eligible for federal funding.