The Valero logo could be coming to some Mexican gas stations. The Valero logo could be coming to some Mexican gas stations.

Major US refinery firm is heading for Mexico

Valero Energy building storage, distribution facilities so it can supply gas stations

United States-based oil refining firm Valero Energy is preparing for its venture into fuel distribution in Mexico, which will entail the construction of three storage and distribution facilities representing an investment of US $200 million.

The Fortune 500 firm reported it is in the process of obtaining the necessary permits from the Energy Regulatory Commission (CRE) to begin construction.

With a storage capacity of almost 1 million barrels, the Altamira, Tamaulipas, facility will be the largest.

The other two will be built in the cities of San Luis Potosí and Monterrey, with a storage capacity of 325,000 barrels each.

The transnational oil company intends to operate similar facilities throughout Mexico, with the three terminals representing the first stage of its expansion strategy.

During the second stage, Valero Energy intends to cover the northern and southeastern markets. The company will transport its fuel to Mexico via tankers, and distribute within the country via tanker trucks and trains.

Despite pipelines being the cheapest way of transporting fuel, Valero has discarded that option based on the security concerns presented by huachicoleros, or pipeline thieves.

Valero is set to compete directly with Pemex as a supplier to gas stations, to which it will also offer for sale the use of the Valero name. But Valero will neither own nor franchise the stations.

The president of the gas station trade organization Onexpo said the opening of the fuel market in Mexico is a historic event, and is attracting investors interested in sectors such as imports, storage, distribution, transportation and commercialization.

“For the first time in over 80 years, over 10 national and transnational companies are participating on the same ground, head to head, as intended by the energy reforms,” José Ángel García Elizondo told a press conference.

“We’re about to conclude the three main stages of this opening up [of the market],” he continued. “In 2015 it opened up to other brands, in 2016 to imports and finally this year there is a progressive liberalization of fuel prices.”

Once that final process is over, he concluded, the Mexican fuel market will witness greater dynamism in competition among brands.

Source: Milenio (sp)

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