Francisco Guajardo
Director General
Grupo DIDSA
/
View from the Top

Financing, Technology and Alliances in Natural Gas

Wed, 02/21/2018 - 11:28

Q: What makes Grupo DIDSA’s proposal for Mexico’s natural gas sector unique?

A: When the Energy Reform was implemented, some construction companies did not necessarily understand the inherent implications and opportunities. DIDSA was able to capitalize on this new landscape. There are three elements Mexican companies required at the time to reap the benefits of this transition and place themselves in a strategic position. 

First, financing. Project financing drastically changed from the prior scheme where PEMEX was a solid financial guarantee. With the reform, you need to look for new financing structures that allow you to deliver turnkey projects without financially draining your client. 

Second, technology. We set out to find the best technologies available in the market. In 2016, at the Dutch Embassy in Mexico City, we signed a technology transfer agreement with the Dutch government. We reached this milestone thanks to our association with Magnatech, a Dutch company with the most advanced technology for automatic welding. We acquired this technology and equipment to integrate it into our business line, becoming one of the few companies in Mexico with in-house automatic welding technology. 

Third, strategic alliances. Grupo DIDSA wanted to transition from construction to a full-fledged EPC company. To reach this goal, we closed alliances with veteran companies like Stantec. We also developed an open channel with Emerson to generate added value to our final clients by providing Emerson’s technology and services. In addition, we designed a business strategy with American Worldwide Group Machinery. This tripartite comparative advantage gave us the necessary tools to undertake ambitious projects like CFE’s natural gas pipeline bid for Samalayuca-Sásabe pipeline, using 36-inch pipes owned by Carso.  

Q: How did DIDSA’s construction know-how contribute to the incorporation of renewables in its business line?

A: We have more than 35 years of experience in oil and gas but DIDSA’s growth was dependent on finding other business opportunities. In 2010, we successfully devised a business proposal for a biogas power-generation project using Saltillo’s landfill. Considering the energy market’s evolution, we wanted to diversify our business relationship with PEMEX and to broaden our horizon to include the private sector. 

Our business diversification with natural gas heavyweights set the course for our current project to have 50 vehicular natural-gas stations distributed nationwide through a cobranding with Gas Natural Fenosa. We hope to close this first phase in the next six years. We will then launch a second phase to have 100 operational stations in 10 years.

Q: What key factors led you to design and launch this project?

A: Mexico is undergoing a major gasification trend nationwide. In addition, Mexico offers the most competitive molecule cost. This will greatly increase the number of distribution points across the country. This project seemed like the natural next step for our company. It primarily targets public transportation: taxis and urban buses. The equivalent liter of natural gas for a vehicular engine can be sold for MX$8 versus MX$16 for magna gasoline. We based our strategy for this differential by tackling natural gas infrastructure and supply to stimulate demand for this cheaper and more environmentally-friendly fuel.

Q: What milestones have you achieved with your High Technological Specialization Center?

A: Human capital is at the core of DIDSA’s interest. The Specialization Center is another byproduct of our MoU with the Dutch Embassy. We are also working on similar initiatives with the UK government. As Mexico’s energy sector liberalizes, we must be able to provide the market with specialized and trained Mexican professionals who are capable of handling the latest processes and technologies.