New Mexican fuel storage key to free gasoline market
Mexico's central region, consisting of Mexico City and Mexico, Puebla, Tlaxcala, Hidalgo and Queretaro states, has the largest gap between fuel production and demand in the nation, with a shortfall of some 189,000b/d at present. This creates great opportunities in the fuel storage sector, shown by the fact that some 14 fuel storage projects are currently underway in this part of the country.
BNamericas spoke to the vice president of the Valle de México branch of Mexican gasoline retailers organization Onexpo to discuss the factors driving contruction of additional fuel storage capacity in and around Mexico City.
BNamericas: What is the situation regarding fuel storage in central Mexico?
Fernando González: In the center of the country, which has the highest fuel demand in the country, the installed storage capacity is basically controlled by Pemex, with the exception of a small terminal in Guanajuato state, which has started operating for the private use of its owners.
Faced with this lack of storage capacity and insufficient infrastructure, and in light of the changes made due to Mexico's energy reform, some groups of service station owners have started taking steps of their own to create fuel storage terminals, either for their own use or to offer these services to third parties.
BNamericas: How many service stations need to be bundled together to make it attractive to search for a joint storage option?
Fernando González: That depends on the size of the project and the volumes of the different gasoline stations. I think that with volumes of around 100mn liters of gasoline, it's worthwhile considering building one's own storage facilities.
BNamericas: How does the shortage of storage affect service stations?
Fernando González: It means that since the only storage options are owned by Pemex, the opening up of the market is extremely limited in reality. Because Pemex is the only one who has storage capacity, companies are forced to buy gasoline from them. This means that the free market to which the reform aspires implies that everybody has the capacity to import gasoline into their own storage spaces.
BNamericas: On what factors do investment costs for a fuel storage facility depend?
Fernando González: They're large figures, but it's difficult to give general estimates since [required investments] depend on the cost of the land and its location, as well as the size of the project.
BNamericas: Who is taking the initiative on fuel storage projects, service station owners or engineering, procurement and construction companies?
Fernando González: It's a market where both sides are active. There are groups of gasoline stations which are entering this market, as well as companies that have been active in the fuel storage market for a longer time and sometimes internationally that are moving projects forward.
BNamericas: What kinds of different business models are you seeing?
Fernando González: Basically some are only offering services to third parties, while others are offering services to third parties as well as making use of the capacity for their own use.
BNamericas: How quickly do you see storage capacity growing in Mexico's central region?
Fernando González: Hopefully by the end of next year we'll see the first new fuel storage facilities coming online in the center of the country.
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