U.S. Fuel Companies Rushing to Set Up Shop in Mexico

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U.S. Fuel Companies Rushing to Set Up Shop in Mexico

Pemex forecourt

NATIONAL REPORT — Now that Mexico has finished liberalizing prices for gasoline and fuel across the country, U.S. companies are jumping at the chance to supply a newly free Mexico fuel market.

As Chron.com reported, foreign companies were allowed to start moving fuels in April 2016, but now consumers' costs will be more closely aligned with the ebbs and flows of the open market.

As fuel specifications and prices align, U.S. companies are working to make transportation to Mexico seamless. On the U.S. border with Mexico, trucks and trains move southward from Texas refineries to fuel distribution terminals south of the Rio Grande.

On Nov. 30, Mexico's energy regulator announced the end of government-set fuel prices in the remaining central and southern regions where price caps were still being applied.

Chevron Corp., Exxon Mobil Corp., Royal Dutch Shell Plc and BP Plc are among the international companies investing in service stations in Mexico and are now seeking to import fuel.

Chevron plans to import fuel into Mexico from California, where it has two refineries, once the infrastructure is available, Jose Parra, head of the company's Mexico fuel operations, said in Mexico City. Chevron plans to open 350 gas stations in Mexico in two to three years, while Exxon Mobil inaugurated its first gas station in Mexico on Dec. 6, according to an emailed statement.

An increasing number of foreign firms, including Koch Supply & Trading Mexico, or KMEX, plan to invest in ports terminals, fuel storage facilities and other logistics infrastructure in order to compete with state-owned Petroleos Mexicanos, the primary fuel vendor and distributor in the country.

"The transparency and market-based pricing associated with the regulatory reform, which goes into effect today, is helping KMEX to execute their business development plans in the country," said Eduardo Andrade, a distillates trader for Koch.

Kinder Morgan Inc. has also added two gasoline grades on its California pipelines that meet Mexican specifications.

"We made changes to our Pacific operations manual to incorporate Mexico product grades in anticipation of future demand for those services," Kinder Morgan spokeswoman Melissa Ruiz said in an emailed response to questions from Chron.com.