TransCanada plans Mexico oil logistics project

OREANDA-NEWS. August 03, 2016. Midstream company TransCanada plans to develop refined oil products storage and transportation infrastructure to facilitate supply from the US Gulf Coast into central Mexico.

TransCanada and its partners, Mexican independent Sierra Oil and Gas and regional maritime shipping company Grupo TMM, will invest \\$800mn in the project, the "largest single investment in refined products since the establishment of the Mexico energy reform," the firm said.

Mexico?s energy reform, enacted in 2014, dismantled the monopoly of state-owned Pemex and paved the way for alternative oil suppliers and imports.

The project includes construction of a marine terminal near the Gulf Coast port of Tuxpan, Veracruz, a 265km (164.6mi) products pipeline and an inland storage and distribution hub in central Mexico.

The marine terminal, with a draft of 42ft (14m) and featuring four docking positions, will connect via pipelines to key distribution centers and will offer racks for truck loading and barge access to other Gulf Coast ports.

"The number and size of the vessels that will be serviced simultaneously gives our project significant advantages over other projects in the region in terms of flexibility, speed and efficiency," TransCanada said.

The 100,000 b/d pipeline will transport products such as gasoline, diesel and jet fuel and will run parallel to TransCanada's recently awarded \\$500mn Tuxpan-Tula natural gas pipeline project.

The inland distribution hub is close to major highways and distribution centers in central Mexico, TransCanada said.

"The Tuxpan-central Mexico corridor is the ideal route to efficiently supply refined products in the region making this project a significant contribution to the existing refined products distribution chain in Mexico, the company said.

TransCanada will hold a 50pc interest in the project, with Sierra holding 40pc and Grupo TMM 10pc.

The project's launch date will be based on discussions with contract shippers, TransCanada said.