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Partners Propose $800M Gulf Coast-Mexico Refined Products System

TransCanada Corp., Sierra Oil & Gas and Grupo TMM are proposing to jointly develop storage and transportation infrastructure to serve growing demand for refined products such as gasoline, diesel and jet fuel, in the central region of Mexico and surrounding markets. The pipeline project would run parallel to a recently announced TransCanada natural gas pipeline and would transport refined products to Central Mexico from the Gulf Coast.

The proposed US$800 million project would be the largest single investment in refined products since the establishment of reforms to Mexico's energy sector, according to the companies. TransCanada would hold a 50% interest, with Sierra Oil & Gas holding 40% and Grupo TMM holding 10%.

The project includes a marine terminal near Tuxpan, Veracruz for offloading and distribution of refined products; a 165-mile refined products pipeline; and an inland storage and distribution hub in central Mexico. The marine terminal will include four docking positions and will be pipeline-connected to distribution centers in the region. It will offer racks for truck loading and barge access to service the demand of other ports in the Gulf Coast.

The 100,000 b/d refined products pipeline would parallel TransCanada's recently awarded Tuxpan-Tula natural gas pipeline project (see Daily GPINov. 11, 2015). The inland distribution hub in central Mexico will provide connectivity to the majority of the Mexico Valley market with access to major highways and distribution centers.

The in-service date will be based on discussions with contract shippers.

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