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Mexico’s Hydrocarbons Storage Project

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Mexico’s need for greater hydrocarbon storage is rapidly growing with an expanding fuel sales network, increased O&G trade at key Gulf of Mexico ports and the president’s drive to boost refining in the country.

In addition to six projects (with capex of more than $50m) currently at the pre-construction or construction stage, the BNamericas project database is tracking seven storage projects currently in early works, and more projects will be added to the pipeline in the short or medium term.

For example, CFEnergía, the gas and fuels sales subsidiary of state-owned power utility CFE, reportedly met last week with private investors to gauge interest in building a new liquefaction and storage project in Oaxaca state that would potentially allow it to export gas derived from import contracts with US providers that exceed its current consumption.

According to the report, the new floating natural gas liquefaction (FLNG) terminal would process 430Mf3/d (million cubic feet per day), with the possibility of expansion up to 1Bf3/d, for a total investment of between $1bn and $2bn.

The terminal would be located at the southern end of the to-be-tendered Jáltipan-Salina Cruz pipeline facing the Pacific Ocean.

This pipeline is itself one of the components of the current administration’s broader Tehuantepec Isthmus rail, gas, and highway corridor project, connected to Gulf of Mexico assets and gas pipeline infrastructure leading back up north to the US, west to central Mexico and east to the Yucatán Peninsula.

The start of operations is expected for 2024 and the project would be built under a public-private partnership.

According to CFEnergía, it imports 8Mf3/d of gas from the US, but only ends up using 4.6Mf3/d to power its thermal plants and fulfil its own supply contracts.

And it expects to still have excess supply once six new combined cycle units it is tendering come online over the next half decade.

Other projects are expected to be rolled out as part of Mexico’s national infrastructure plan (PNI), with 22 port projects listed in the updated first round of the PNI (January 2020) amounting to 73.7bn pesos in investments ($3.7bn).

Only a handful of those projects surpass $50m in capex and are therefore included in the project database, and the government has provided precious little details on some of the listed PNI projects that BNamericas has begun tracking.

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