Valero Marketing and Supply de México, S.A. de C.V., an indirect wholly-owned subsidiary of Valero Energy Corporation, has signed long-term agreements with Infraestructura Energetica Nova, S.A.B. de C.V., to import refined products at the new Port of Veracruz.
In July, IEnova won the Port of Veracruz’s bid for a 20-year concession to build and operate a new marine terminal for the receipt, storage, and delivery of refined products. IEnova executed the concession agreement today with the Port Authority of Veracruz to develop, construct, and operate the terminal.
The new terminal to be built by IEnova will have approximately 1.4 million barrels of storage capacity. IEnova will also build and operate two additional storage terminals, strategically located near Puebla and Mexico City, which will have initial storage capacities of approximately 500,000 and 800,000 barrels, respectively.
Valero has contracted with IEnova to use all three terminals, to supply gasoline, diesel, and jet fuel to customers. The marine terminal in Veracruz will start operations as early as the end of 2018, with the two inland terminals serving customers in early 2019. Valero will also have an option to acquire a 50 percent interest in each of the terminals.
“We are pleased to enter this relationship with IEnova, a well-respected energy infrastructure company,” said Joe Gorder, Valero Chairman, President and Chief Executive Officer. “With the recent Constitutional reform, it is now possible for Valero to import refined products directly into Mexico for further distribution, including branded sales. This transaction will enable us to extend our supply chain to efficiently supply gasoline, diesel and jet fuel to the growing Mexican market. As we continue to evaluate ways to further engage in Mexico, we look forward to discussing opportunities with Pemex that advance our respective strategic objectives, as well as discussing supply arrangements with independent retail operators.”
Carlos Ruiz Sacristán, CEO and Chairman of the Board of IEnova, stated that “with this transaction, we demonstrate IEnova’s ability to continue adding new business segments to our portfolio while maintaining our solid business strategy. Mexico will require important investments in the transportation and storage of refined products in the next years, and IEnova is ideally positioned to become a leader.”
In addition, Valero separately executed a long-term agreement with rail company Ferromex S.A. de C.V., which is majority-owned by Grupo México S.A.B. de C.V., to transport refined products from Veracruz to the inland terminals via unit trains.
“This agreement reflects a clear opportunity to create new fuels transportation alternatives and improve logistic efficiencies in Mexico,” said Fernando Lopez, Ferromex Chief Marketing Officer. “Ferromex has more than 10 years of experience moving fuels through our network. We are excited to provide the significant security and flexibility of our rail services to a new customer like Valero in a growing Mexican fuels market.”