Why Mexico?

Mexico’s demand for gasoline, diesel and jet fuel continues to grow, as does their reliance on imports to fill the void between demand and domestic supply<br />

SENER 2018 – 2031 Projections:

Total demand for gasoline, diesel and jet fuel will increase from 1,350 thousand barrels / day (MBD) to 1,673 MBD (AAGR of 1.7%)
Total imports of gasoline, diesel and jet fuel will increase from 619 MBD to 968 MBD (AAGR of 2.1% ), averaging 816 MBD, or 53.5% of demand if 2P domestic oil production is realized (2P)
2017 gasoline, diesel and jet fuel imports (768 MBD) accounted for 58% of demand
Gasoline demand will increase from 847 MBD to 1,009 MBD (AAGR 1.4%), with imports averaging 593 MBD, or 63.3% of demand (2P)
2017 gasoline imports (534 MBD) accounted for 64% of demand

Diesel demand will increase from 421 MBD to 545 MBD (AAGR 2.0%), with imports averaging 177 MBD, or 36.1% of demand (2P)
2017 diesel imports (210 MBD) accounted for 51% of demand

Jet fuel demand will increase from 82 MBD to 119 MBD (AAGR 2.9%), with imports averaging 47 MBD, or 46.0% of demand (2P)
2017 jet fuel imports (24 MBD) accounted for 31% of demand

Mexico’s objective of improving their energy security is driving national policy and creating an exceptional opportunity for private investment in Mexico’s storage sector

January 2017 – “Modernization of Mexico’s infrastructure is now a matter of energy security. Authorities are working on a national policy that will include a private system of transportation and storage…”
Current countrywide storage capacity for gasoline, diesel and jet fuel is ~ 3 days, compared to an average of 30 days in Canada and the US
Refined fuels demand and imports are booming, intensifying the energy security / storage problem  
Mexican fuel demand will grow 40% over the next 25 years(3)
In 2017, Mexico imported > 58% (768 thousand barrels / day) of their refined products4
December 2017 – Mexico publishes their National Policy mandating minimum storage stocks for gasoline, diesel and jet fuel
Over 11 MM bblsof new storage facilities are required by 2025 to meet the new minimum inventory requirements6
Private capital is essential for Mexico to achieve its National Policy mandated minimums
President Andres Manuel Lopez Obrador’s [AMLO] announced plan to inject USD $9.4 Bn into PEMEX’s upstream and refining sectors does not contemplate any investment in storage infrastructure

Mexican Energy Reform Key Objectives

  • Modernize refining, transportation and storage infrastructure
  • Create jobs and generate economic growth
  • Increase transparency and reduce corruption in the energy sector
  • Generate more hydrocarbons at lower cost and risk

Opportunities for Projects

  • Fuel and energy storage and distribution infrastructure
  • Mexico  has an average of only 3 days of fuel storage capacity, compared to +60 days in North America
  • Current storage capacity for LNG is 2.4 days
  • 7 days average wait for vessels to load/unload in existing ports

Private Development

  • Capitalizing on the private development of the Mexican energy industry driven by the federal government’s reform initiative.
  • Mexico’s Public Policy of Minimum Storage of Petroleum Products1mandates Minimum Inventory Requirements (MIR) that must be met by 2020, 2022 and 2025

Stable and Predictable Business Environment

  • Industry operates with USD denominated take-or-pay contracts
  • With creditworthy off-takes •
  • Providing stable, predictable long-term cash flows •

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