Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Shipping

Port of Lazaro Cardenas tenders fuel terminal project on Mexico's Pacific Coast

Electric Power | Nuclear | Natural Gas | Oil | Crude Oil | Metals | Steel

Market Movers Europe, Oct 14-18: Oil markets focus on Putin's Saudi Arabia visit; Brexit looms over carbon market

Shipping

Platts Dirty Tankerwire

Oil | Refined Products | Fuel Oil | Shipping | Dry Freight | Marine Fuels | Tankers

Mediterranean Bunker Fuel Conference, 8th Annual

Shipping | Tankers

LR1s switch to Panamax market on higher dirty tanker rates, Americas supply tightens

Port of Lazaro Cardenas tenders fuel terminal project on Mexico's Pacific Coast

Mexico City — The federally administrated Port of Lazaro Cardenas is holding the first public tender to build a fuel terminal project on Mexico's Pacific Coast, the port's planning director, Jaime Ramirez Jaime, said Monday.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The port authority expects a dozen companies to participate in the process, receiving proposals on February 2. The winning bid will be announced in early March, Ramirez said in an interview.

The new facility is expected to be operational within 24 months.

The lack of logistic infrastructure has been an obstacle for new fuel marketers to enter and operate in Mexico, as well to compete against state oil company Pemex.



To date, Vopak operates the only private marine import terminal in the country, which is located in the Port of Veracruz in the Gulf of Mexico.

In July, the Port of Veracruz awarded IEnova in a public tender the construction and operation of a fuel marine terminal, which is expected to be operational by the second half of 2018.

A growing economy, middle class and auto fleet make Mexico an attractive market for oil companies.

Rising demand has made it the world's fourth-largest consumer of gasoline, according to Mexico's Energy Secretariat (SENER).

The Mexican government anticipates that in 2017, the country consumed 829,600 b/d of gasoline, of which 64.4% was supplied by imports.

ExxonMobil expects Mexico's gasoline demand to rise 40% in the next 25 years, while US demand falls 17% during the same period.

The port authority commissioned a feasibility study, revealing that the new terminal could fulfill demand for 900,000 tons/year (20,835 b/d) of imported gasoline and diesel in Michoacan, the greater Mexico City area and the Bajio region.

Fuel received by the terminal would be moved via trucks or rail. Kansas City Southern Mexico has control of the rail services in Lazaro Cardenas.

The company began shipping fuel in 2017, reaching 39,900 b/d in Q3.

This is the volume the terminal could fulfill if Pemex's 330,000 b/d Salina Cruz refinery, Mexico's largest, continues operating at levels similar to those in the past couple of years, Ramirez said.

However, Ramirez said companies could propose to build a facility as large as they see fit. The terminal would give access to private companies to import fuel from Asia or the US West Coast.

To date, according to Mexico's Economic Secretariat, Japan, China, Malaysia, Singapore, India and South Korea exported gasoline and diesel to Mexico.

Something that wasn't explored in the feasibility project, but there is a great opportunity for, is to transform Lazaro Cardenas into a major distribution hub for the Pacific Coast of Mexico and even Latin America.

Imported fuel could be stored and distributed via smaller vessels to shallower ports across the Pacific Coast of Mexico, which is something that Pemex already does as Lazaro Cardenas is the storage and distribution hub for products refined in Salina Cruz.

Lazaro Cardenas is Mexico's deepest port, with a depth of at least 17 meters in all its channels, allowing large class ships to unload, which significantly decreases transportation costs, Ramirez added.

"Lazaro Cardenas has a great capacity to become a distribution center for other ports," Ramirez said.

A 1.5 million-barrel terminal could allow Lazaro Cardenas to become a large distribution hub, he added.

Ramirez said the feasibility isn't for public distribution as it is an integral part of the port's strategic plans.

"There is a market opportunity. However, it isn't tremendous as the Gulf of Mexico has the market edge," Ramirez said. Ports like Veracruz Tuxpan, and Altamira in the Gulf region are closer to refiners in the US, giving them an advantage.

Lazaro Cardenas is one of the few Mexican ports within a Special Economic Zone, which provides tax and regulatory advantages for new investments.

In addition, Mexico's Gen Manejos Integrales is repurposing its boat decommissioning terminal at Lazaro Cardenas as a fuel storage and distribution terminal.

The terminal is expected to be operational in 2019.

However, the port authority doesn't know how large the facility will be until the company submits its final development program.

--Daniel Rodriguez, newsdesk@spglobal.com
--Edited by Annie Siebert, ann.siebert@spglobal.com