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US companies keen on expanding into Mexico with new liberalized gas prices

From large oil companies to gas pipeline operators, several companies in the United States are preparing to take advantage of the opportunity to supply gas to the newly liberalized fuel market in Mexico.

After years of preparation, Mexico finished liberalizing the price of gasoline and diesel throughout the country. Since April of last year, foreign companies can move fuels, but now costs to consumers will be more closely aligned with the dynamics of the open market.

As fuel specifications and prices align, US companies are working to make transportation to Mexico fluid.

At the US-Mexico border, trucks and trains move south from the Texas refineries to the fuel distribution terminals south of the Rio Grande.

A growing number of foreign companies, including Koch Supply & Trading Mexico, or KMEX, plans to invest in port terminals, fuel storage facilities and other logistics infrastructure to compete with Petróleos Mexicanos (Pemex), the main supplier and distributor of fuel in the country.

The Corona II vessel was ready to transport Koch’s second Mexican diesel import to the Vopak terminal in Veracruz, the first non-Pemex terminal that imports fuels, the company said.

“Transparency and market-based pricing associated with regulatory reform, which is in effect today, are helping KMEX execute its commercial development plans in the country,” said Eduardo Andrade, a distillate operator at Koch.

In mid-November, the Energy Regulatory Commission announced the end of government fuel price controls in the remaining central and southern regions, where price caps were still being applied.

Chevron, Exxon Mobil, Royal Dutch Shell and BP are among the international companies that invest in service stations in Mexico and are now looking to import fuel.

Chevron plans to import fuel to Mexico from California, where it has two refineries, once the infrastructure is available, said José Parra, head of fuel operations for the company in Mexico.

The company plans to open 350 service stations in Mexico in two or three years, while Exxon Mobil will open its first service station in the country on December 6, according to a statement.

Kinder Morgan also added two grades of gasoline in its California pipelines that meet Mexican specifications.

“We made changes to our Pacific operations manual to incorporate Mexican product ratings in anticipation of future demand for those services,” Kinder Morgan spokeswoman Melissa Ruiz explained.