MEXICO CITY--(BUSINESS WIRE)--Monterra Energy (“Monterra”) today announced its plan to build a refined products pipeline to improve efficiency and competition in Central Mexico. Monterra is an independent midstream company that has an equity commitment from KKR, a leading global investment firm, and specializes in the development and acquisition of midstream infrastructure in Mexico.
The pipeline announced today will address critical infrastructure needs to transport imported refined products from the port of Tuxpan, Veracruz, into Central Mexico near Tula, Hidalgo. This private pipeline investment will be made possible by the Mexican energy reforms. Mexican consumers will benefit from a more efficient and competitive market with both domestic and imported fuels.
The pipeline will be 18 inches in diameter with a capacity of up to 165,000 barrels per day. Monterra has access to an existing right-of-way that will expedite development and construction and allow an early commercial operation date.
Monterra will anchor the project with two industry leaders - Mexican gas station consortium G500 as well as a leading global commodities merchant, which together will account for a significant portion of the project’s initial throughput volume of 100,000 barrels per day. Monterra will launch an open season in March 2016 for the remaining capacity.
“Thanks to the historic energy reforms instituted by President Enrique Peña Nieto, Monterra and our Mexican partners are able to make investments that will ultimately enable Mexican citizens to have choice in fuels and benefit the Mexican economy with private investment in new infrastructure,” said Arturo Vivar, CEO of Monterra Energy.
“G500 is pleased to participate in such an important infrastructure project for Mexico and continue positioning ourselves as one of the leading gasoline retail groups in the country. Our retail shareholders will benefit from our association with Monterra, as well as with our other strategic partners, in critical pipeline and storage projects, among others, in our regions of influence,” said Antonio Caballero, President and Chairman of G500.
“We are thrilled to have the support of two industry leaders and look forward to serving the needs of others through the development and construction of the Tuxpan-Tula Pipeline,” added Michael Williams, President of Monterra Energy.
About Monterra Energy
Monterra Energy was founded in 2014 by Arturo Vivar and Michael Williams to pursue select investment opportunities in the midstream sector in Mexico. Monterra is distinguished by a proven management team and highly experienced, local advisory board with success across North and South America in the areas of upstream, midstream and oilfield services. In May 2015, KKR made an equity commitment to Monterra for the development of new projects and acquisition of midstream assets and businesses.
About G500
G500 is one of the largest and most important gasoline retail groups in Mexico. G500 currently has nearly 1,400 gas stations with monthly volumes exceeding 815 million liters. The group was created to participate in the energy business given the energy reform taking place in Mexico. G500 will take advantage of economies of scale, synergies and aligned business interests of the group’s shareholders and its extended network. As a large and inclusive group, G500 will also benefit from its member diversity as it participates in the Mexican energy reform. G500 has a presence in most of the major cities in Mexico and will bring efficiencies in refined products purchasing and distributions to its members.