Monterra Energy Plans Fuel Storage Terminal in PueblaBy and
U.S. company is looking to acquire land for the project
Regulator has approved estimated $600m pipeline and terminal
KKR & Co.-backed Monterra Energy could build a fuel storage terminal in the central Mexican state of Puebla as international companies pile into the newly opened gasoline retail market.
The Houston-based company is looking to acquire land in Puebla for the project, according to people with knowledge of the plans. Monterra Energy Chief Executive Officer Arturo Vivar declined to comment.
Mexico’s energy regulatory commission in March last year approved plans for Monterra Energy to build a gasoline, diesel and jet fuel pipeline and fuel storage terminal for an estimated $600 million that is due to be operational in the second half of 2018, according to data from the regulator. The energy regulatory commission said no additional permits had been requested by the company.
The pipeline will run from the port of Tuxpan, Veracruz, to Tula, Hidalgo, in central Mexico and has capacity of 165,000 barrels a day, the company said in March last year.
Monterra Energy, which has a joint venture with U.S. private equity firm KKR to develop fuel infrastructure in Mexico, is among a number of private companies that are looking to move into the gasoline sector. Since April 2016, companies other than state-owned Petroleos Mexicanos have been allowed to import fuel.
Exxon Mobil Corp., BP Plc, and Glencore Plc have announced investments in gas stations in Mexico, and Spain’s Repsol SA is studying the market. Tesoro Corp. won capacity on Pemex’s pipelines and storage facilities in May, and commodity traders such as Trafigura Group and Koch Supply & Trading LP have applied for fuel-import permits.
The new fuel terminal would aim to supply about half of Puebla’s gas stations, which total more than 500, said one of the people. The person said that the new facility could help ameliorate shortages of gasoline resulting from rampant fuel theft on Pemex pipelines.
Puebla is the second worst state in Mexico for illegal pipeline taps, which have soared almost 70 percent in the first five months of this year from a year earlier to more than 28 taps a day, Pemex data show.
Fuel theft costs the state oil company about 20 billion pesos ($1.1 billion) a year, according to Chief Executive Officer Jose Antonio Gonzalez Anaya.
— With assistance by Adam Williams