CFE to offer fuel storage in Mexico
CFE could make available up to 2.5mn bl of storage throughout Mexico, most likely beginning with facilities in the northern states of Baja California and Sonora, the two first states where fuel prices will be deregulated on 30 March.
"I'm hoping that by the second week of February, we will be able to let the market know," Turrent said yesterday on the sidelines of an energy conference.
The CFE mainly stores fuel oil and diesel used in older power generating units, but the utility is gradually converting its operations to use less costly and more efficient natural gas.
In a presentation at the conference today, CFE chief executive Jaime Hernandez confirmed the storage opening plan, adding that tanks could be converted to store more widely used gasoline.
Hernandez said the CFE would make an announcement in the next two weeks.
State-run oil company Pemex is currently holding its first open season in Baja California and Sonora, offering up to 15pc of its gasoline and diesel storage capacity, or some 161,600 bl.
Industry participants have told Argus that the CFE could eventually make available up to 50pc of its total storage capacity, or about 5.1mn b/d.
Turrent did not rule out the possibility that the CFE could eventually free up more capacity, but maintained that the "immediate" available storage was around 2.5mn bl.
"We start small and we will see where we go from there," he said.
Mexico's fuel liberalization program, part of a 2014 energy reform package, will occur gradually throughout this year, beginning in the north of the country, near the US border, where fuel prices are cheaper than in other parts of Mexico. The process will end in the Yucatan peninsula in December 2017.
The price liberalization process started on 1 January when the government issued a new, temporary fuel pricing formula that led prices to increase by 14.1-20.1pc. The formula will be updated on 4 February and again on 11 February.