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Glencore's private terminal in Mexico's Dos Bocas port receives its first gasoline cargo: sources

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Glencore's private terminal in Mexico's Dos Bocas port receives its first gasoline cargo: sources

Houston — Glencore has received its first gasoline shipment at its new 600,000-barrel marine terminal at the Port of Dos Bocas in the southeastern Mexican state of Tabasco, state authorities and market sources said.

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This makes it the first waterborne shipment of gasoline contracted and unloaded at a privately developed marine terminal in Mexico.

Since the summer of 2017, Koch Industries has been sending waterborne shipments of diesel to Vopak's marine terminal at the port of Veracruz.

Glencore's media team in Mexico City declined to immediately comment Friday.

However, Herminio Silvan, deputy secretary of economic development with the state government told local reporters on Thursday that the shipment came from Galveston and carried 135,200 barrels of gasoline.

Silvan said he expects fuel deliveries and the terminal operations will lead to a reduced fluctuation and possible lower gasoline prices in the area as "gasoline prices are influenced by local logistics."

The vessel delivering the cargo was the Chembulk Ulsan, according to a broker shipping source. Platts cFlow trade-flow data showed the Chembulk Ulsan loaded at Texas City August 19-21 and arrived in Dos Bocas on August 23. A shipping source also confirmed that the vessel arrived at Dos Bocas August 23.

According to the shipping source, the terminal's draft has a maximum of 24 feet, which restricts the size of the vessel that can discharge at the port. The Ulsan, smaller than the typical Medium Range tanker used to move gasoline and other products, had a 20,000 dwt capacity.

Lack of import infrastructure has prevented new fuel wholesalers from importing fuel into Mexico's liberalized market. So far, ExxonMobil and Andeavor were the only other two companies importing gasoline in Mexico as marketers.

ExxonMobil has been using unit train terminals to bring fuel from its 366,000-b/d Beaumont refinery in Texas. Meanwhile, Andeavour has acquired capacity at marine terminals in Northwestern Mexico at Pemex's logistic open seasons.

Private fuel imports have just started to pick up in the second half of the year although SENER began giving import permits almost two years ago. In July, Pemex still controlled 96.5% of gasoline imports into the country, although over 24% of Mexico's retail stations are under a non-Pemex brand.

Pemex's market share over gasoline imports is expected to erode in the coming years as new privately developed marine terminals begin operating. Right now, close to 20 terminals with a combined capacity to store 20 million barrels of refined products are being privately developed.

The Dos Bocas was initially expected to begin operations in March. However, delays in the safety test and permitting process delayed the entrance in service of the terminal.

Tabasco is an attractive market for new fuel marketers entering Mexico as national oil company Pemex primarily supplies it with refined products from its 285,000 b/d Minatitlan refinery and imported fuel via its Pajaritos marine terminal, which is located 270 kilometers away from Dos Bocas.

The Minatitlan refinery has been operating at low levels since the last quarter of 2017 when it underwent a total overhaul. The refinery was restarted in February, reaching a production of 51,000 b/d in May. However, the refinery was shut down again shortly after to do another round of repairs at its main catalytic unit.

Glencore's retail franchise in Mexico, G500 Network, previously said that the Dos Bocas terminal would supply 200 G500-branded stations in southern Mexico. However, its total coverage area is close to 400 stations.

Pemex's downstream director, Carlos Murrieta, said earlier this year that Pemex and Glencore were interested in the opportunity to hold product swaps between the state of Tabasco and the greater Mexico City region.

Last year, the Swiss trader positioned itself as the largest private retail group after partnering with Mexico's retail group Grupo 500 to launch its own brand G500 Network. The consortium has over 1,400 pump stations in Mexico, over 10% of the country's total.

Glencore is also developing a new marine terminal in the Port of Tuxpan, Veracruz. The facility is expected to be operational by Q3 2019 and supply close to G500's 400 stations, primarily in the Mexico City region.

--Daniel Rodriguez, newsdesk@spglobal.com

--Silvia Struthers, silvia.struthers@spglobal.com

--Marieke Alsguth, marieke.alsguth@spglobal.com

--Edited by Derek Sands, derek.sands@spglobal.com