Juan Hernández
Director General
Industrias Estratégicas
View from the Top

Cost-Effective Natural Gas for Southeastern Region

Wed, 02/21/2018 - 16:55

Q: What is Industrias Energéticas' (IE) added value as a service provider of the hydrocarbon industry? 

A: IE is a 100 percent Mexican company, with more than 15 years of experience in the sector. It can provide effective and reliable solutions with the support of warranties that few companies can provide. We are among only nine companies in Mexico certified as socially-responsible in Campeche for our type of activities.

Q: What new developments is IE undertaking?

A: The Ministry of Energy’s Natural Gas Pipelines Five-Year Plan 2015-2019 completely left out Mexico’s southeastern region: Tabasco, Campeche, Yucatan and Quintana Roo. The region was not deemed strategic within the plan, while it is vital for IE’s growth. The region’s growth and bolstering of the tourism, maquiladora and commercial infrastructures are based primarily on electricity tariffs. These tariffs are at levels that hinder the development of the previously mentioned sectors, particularly for diesel and conventional fuel. The industrial and commercial sectors in the region cannot grow without cost-effective energy and the required infrastructure to supply it.

Q: What challenges is IE tackling in extending pipelines to Mexico’s southeast region?  

A: We closed a strategic partnership with ENGIE for the Mayakan natural gas pipeline extension. This pipeline brings natural gas from the Nuevo PEMEX complex in Tabasco to CFE’s electricity terminal in Valladolid, Yucatan. The French natural gas powerhouse has a project to extend this pipeline from Merida to Punta Nizuc, in Cancun to supply all the Riviera Maya’s demand, which has considerably increased in recent years. The importance of this project can be shown in the overwhelming demand for natural gas in the region. Prior to this extension, ENGIE’s contract with PEMEX required 150mmcf per day while PEMEX can only manage to provide at most 80mmcf, which are nitrogencontaminated. In parallel, IE is planning to bring an LNG vessel to Punta Nizuc to cover the short-term demand for natural gas in this location. Loading in Puerto Progreso, we could supply close to 100mmcf per day to cover the prevailing shortage. While infrastructure for these kinds of services remains deficient, several investors have expressed their interest in placing capital to develop the infrastructure for this service.

Q: How has IE’s footprint in vehicular natural gas evolved since our last interview?

A: One of IE’s divisions specializes in converting dieselfueled buses with a dual-conversion kit to natural gas. We have developed the required infrastructure and equipment to provide natural gas via onsite or virtual compression stations. Companies such as Metrobús, Estrella Roja and Flecha Rocha could benefit greatly from this particular service.

Q: What landmarks is IE targeting for 2018?

A: For IE, 2018 means a sizable challenge to rise above. We are coordinating the company’s spread toward subsectors of the oil and gas market that constitute our specialty, where we are developing a strong foothold and will reap the fruits of our efforts from 2017, including large-scale, sustainable projects directed toward PEMEX. IE complies with all norms and specifications, both national and international, showcasing itself as a top-tier company. We are launching a new division, dedicated to hydrocarbon commercialization and import, including gasoline, diesel, natural gas and liquid oil derivatives to sell in the Mexican market. IE is also the first Mexican company to issue a US$70 million IPO directed at Canada’s TSX Venture Exchange and a second worth US$500 million on the Toronto Stock Exchange. This strategic move answers Mexico’s natural gas commercialization opportunities with the productive companies of the state, as natural gas demand is set to double by 2020. It also addresses the geopolitical changes in the region, primarily from NAFTA’s renegotiation, and our company’s priority to remain one step ahead and cement IE as a world-class company.