UK investment company VH Global Sustainable Energy Opportunities (GSEO) has agreed to buy two storage terminals in Texas, US with a view to supplying less polluting fuels to the Mexican market.
GSEO, paid US$61 million for the two operating terminals, which have a total capacity of 525,000 bbl. The company has committed further capital to developing and expanding both sites by the end of 2021. GSEO will partner with the recently-formed Motus Energy for the expansion work, the founders of which come from BP and Itero Energy. GSEO says that the company shares its commitment to supporting midstream customers pursue a more sustainable future.
GSEO says that it will use the two terminals as a distribution point for clean, low-sulphur fuels into the emerging and competitive Mexican power and transport markets. It plans to take high sulphur fuel oil produced in Mexico, and send it to the more modern and efficient Texas refineries to de-sulphurise and lighten the fuel oil into ultra low sulphur fuel oil (ULSFO) or ultra low sulphur diesel (ULSD) which contain an average of 0.1-0.2% in sulphur. Such products are compliant with US and European standards, with emissions containing fewer particulates and also emitting less CO2 and NO2.
‘The project will help materially reduce the environmental and health threats that high sulphur fuels have on the natural habitat and human health. By reducing the availability of high sulphur fuel oil [HSFO] for domestic consumption in Mexico and displacing it with cleaner less pollutive products, GSEO aims to help reduce SO2, CO2 and NO2 emissions by over 85%, particularly in large urban areas around the country. This displacement programme is central to supporting the Mexican government in achieving its Paris Accord targets, and this remains the mission of GSEO and Victory Hill.’
Motus Energy CEO Michael Gruener adds: ‘We have worked with the Victory Hill team in the past in trying to uncover terminal infrastructure positions in South Texas. We see an excellent opportunity to support the displacement of pollutive fuels in the Mexican fuels market with cleaner products. In our view, this is key to supporting the Mexican government achieve its carbon emissions targets.’
It is the first acquisition made by GSEO which is advised by Victory Hill Capital Advisors and launched on the London Stock Exchange in February 2021.