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TransCanada announces plans for new refined products storage and transportation infrastructure in Mexico

TransCanada Corporation, Sierra Oil & Gas and Grupo TMM announced plans to jointly develop storage and transportation infrastructure to serve the growing demand for refined products such as gasoline, diesel and jet fuel in the central region of Mexico and surrounding markets.

The proposed USD 800 million project would be the largest single investment in refined products since the establishment of Mexico’s energy reform. It involves transporting refined products into central Mexico from the Gulf Coast, providing energy security, jobs and economic growth in the country. TransCanada will hold a 50% interest in the project, with Sierra Oil & Gas holding 40% and Grupo TMM holding 10%.

TransCanada, based in Calgary, Canada, operates a network of natural gas pipelines that extends more than 90,300 kilometres (56,100 miles), tapping into virtually all major gas supply basins in North America. TransCanada is the continent’s leading provider of gas storage and related services with 664 billion cubic feet of storage capacity. TransCanada is also the developer and operator of one of North America’s leading liquids pipeline systems that extends more than 4,300 kilometres (2,700 miles), connecting growing continental oil supplies to key markets and refineries.

Sierra Oil & Gas is the first independent Mexican oil and gas company. With local and international oil and gas expertise, Sierra is concentrated on select, high-quality investment opportunities in upstream and midstream oil and gas niches in Mexico.

Grupo TMM is a Latin American maritime transportation company with more than 60 years of experience. Through its branch offices and network of subsidiary companies, Grupo TMM provides a dynamic combination of maritime services port management and logistics, with extensive experience handling and storing liquids.

The project includes:

  • a marine terminal near Tuxpan, Veracruz for offloading and distribution of refined products
  • an approximately 265 kilometre (165-mile) refined products pipeline
  • an inland storage and distribution hub in central Mexico

The marine terminal, with a draft of 42 feet (14 metres), will include four docking positions. The terminal will be pipeline-connected to key distribution centres in the region and will offer racks for truck loading and barge access to service the demand of other ports in the Gulf Coast. The number and size of the vessels that will be serviced simultaneously gives the project significant advantages over other projects in the region in terms of flexibility, speed and efficiency.

The approximately 100,000 barrel-per-day refined products pipeline will parallel TransCanada’s recently awarded Tuxpan-Tula natural gas pipeline project and expand the company’s growing pipeline footprint in Mexico. The inland distribution hub in central Mexico will provide excellent connectivity to the majority of the Mexico Valley market with access to major highways and distribution centres in the country.

The Tuxpan-central Mexico corridor is the ideal route to efficiently supply refined products in the region, making this project a significant contribution to the existing refined products distribution chain in Mexico.

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