Valero Energy to compete against Pemex in fuel distribution market

22 May, 2017

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U.S.-based oil refiner Valero Energy plans to enter the fuel distribution business in Mexico with three storage and distribution facilities representing an investment of US$ 200 million, local media reported.

The firm awaits the necessary permits from the Energy Regulatory Commission (CRE) to begin the first stage of its take on, with the three terminals to be located in Altamira, Tamaulipas; Monterrey and San Luis Potosi.

With a storage capacity of nearly 1 million barrels, the Tamaulipas facility will be the largest. The other two terminals will feature storage capacity of 325,000 barrels each.

On a second stage, Valero Energy plans 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 security concerns.

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

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