NuStar Energy and PMI, an affiliate of Mexican state-owned petroleum company Pemex, has announced that they have signed a letter of intent for a proposed joint venture (JV) in which the two companies will develop new pipeline infrastructure to transport liquefied petroleum gases (LPGs) and refined products from the US into northern Mexico to meet the region’s growing demand for these products.
‘This landmark alliance is one of the very first commercial agreements between energy companies from the US and Mexico to create a JV focused on infrastructure, and it resulted from Mexico’s recently enacted energy reforms, which call for major investments in energy infrastructure and attracting foreign investment in Mexico’s energy sector,’ says PMI director general Jose Manuel Carrera.
‘While NuStar and PMI previously partnered to transport propane into Mexico, this would be the first JV between the companies, and it would give PMI access to multiple LPG and refined product suppliers in major refining centres in the US Gulf Coast. Because the agreement primarily involves pipeline transportation of the products into Mexico, it would result in more efficient, clean, and reliable transportation of refined products and LPGs between the US and Mexico by reducing the amount of petroleum products transported by truck across the border.’
Under the proposed JV, the companies will jointly fund construction of new pipeline and storage assets, and NuStar would manage construction and operation of those assets. LPGs and refined products will be delivered from Mont Belvieu and Corpus Christi, Texas, to Nuevo Laredo and Burgos-Reynosa, Mexico.
The new pipeline and terminal facilities will be integrated with NuStar’s existing pipeline infrastructure. This project will be supported by a throughput commitment from PMI.
Based on current projections, the projects are expected to be completed and placed into service in the second half of 2016.