TransCanada to develop $800m fuel storage and transportation project in Mexico

TransCanada, Sierra Oil & Gas and Grupo TMM are planning to jointly develop an $800m refined fuel storage and transportation project in Mexico.

The project will serve the growing demand for refined products such as petrol, diesel and jet fuel in the central region of the country, as well as surrounding markets.

It involves transporting refined products into central Mexico from the Gulf Coast and will be 50% owned by TransCanada, while Sierra Oil & Gas and Grupo TMM will hold 40% and 10% respectively.

As part of the project, a marine terminal will be built near Tuxpan, Veracruz, for the offloading and distribution of refined products.

It will also include construction of about 265km refined products pipeline along with an inland storage and distribution hub in central Mexico.

The 42ft marine terminal with four docking positions will be pipeline-connected to key distribution centres in the region and would offer racks for truck loading and barge access to serve the demand of other ports in the Gulf Coast.

The pipeline has a capacity of about 100,000 barrels per day of refined products and will parallel TransCanada's recently awarded Tuxpan-Tula natural gas pipeline project.

With access to major highways and distribution centres in Mexico, the inland distribution hub will provide connectivity to the majority of the Mexico Valley market.

The Tuxpan-central Mexico corridor will serve as the ideal route to supply refined products in the region.

The project's planned in-service date will be based on talks with contract shippers.

TransCanada operates a network of natural gas pipelines that extends more than 90,300km and currently owns or has interests in more than 10,500 megawatts of power generation within Canada and the US.