Javier Vargas
CEO
Petrogas Corporation
Arturo Zamora
Arturo Zamora
Project Manager
Petrogas Corporation
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View from the Top

Gas Station Constructor Laying Foundations for Retail Sector

By Peter Appleby | Wed, 10/07/2020 - 12:26

Q: How does Petrogas guide projects from beginning to end when designing and constructing a retail site?

JV: If a client has land, we are able to construct and equip an entire station. We provide the complete electromechanics installation right up to the lighting of the station. We provide an integrated service. The majority of projects follows the same structure. We know where best to position the pricing signs or the pumps when they are modeled for different brands or companies. We carry out an initial assessment with the client where we discuss their needs, both in terms of what is to be included in the station and how it is to be branded, covering the logos, corporate colors and the lettering to be used. With those characteristics in place, we can begin the architectural design work ahead of construction.

We need to be very specific with construction designs. Clients can request specific details but some cannot be worked into the design for safety reasons. With a gas station, there are very clear and definite regulations that must be respected. If we are constructing a station, it must be well-engineered and meet requirements to avoid dangerous incidents. 

 

Q: How have station designs changed in response to the growth of the sector?

AZ: When the Energy Reform began, foreign brands entered the market. But PEMEX also gave stations the right to operate under a “white flag.” This meant that independent stations could be flagged under a different, private brand. For example, Petro7 or OxxoGas could purchase gas from PEMEX and sell it under their own corporate image. Petrogas developed Petro7’s corporate image and participated in building the company’s presence for the retail sector. The major change that the Energy Reform delivered to the retail market was the change in the quality of gas itself. The quality increased substantially. The fuel molecule is essentially the same, but the new players employ additives that significantly increase the overall return for the customer.

 

Q: What challenges does the Mexican market faces ahead of expanding its gas station network?

JV: Bureaucracy in Mexico is the main problem. Gas station owners, constructors and authorities like ASEA are arduous and overcomplicate a process that could be simpler. Due to the long process times, many companies trying to build stations end up leaving to go into another line of business. The wait is simply too long. The changes that ASEA has undergone in the last year or so has made no difference in the rate by which it processes applications and approves permitting of gas stations. Permits still take a long time. There are a number of authorized third parties that can help with the permitting process but they have not been able to substantially improve the time it takes.

 

Q: How could COVID-19’s arrival impact gas station construction?

AZ: Traffic levels dropped sharply when the pandemic arrived to Mexican shores earlier this year. Our clients, that owns a number of stations, have dropped their sales in different areas of Mexico. This drop in sales has caused a problem for us because if the client is not selling gas then they are unable to invest in projects. The projects we were planning with them have therefore been suspended for the immediate future and will be reviewed again when sales increase. The depth of sales drop depends on where you are in Mexico. For example, gas stations owners in tourist areas have seen their sales drop by 90 percent. 

The arrival of a vaccine would help enormously, but this is not going to happen in the short term. Still, the retail sector has regulations it must meet this year, including retailers having to update their pump systems, which will keep us busy. With many private companies involved in the midstream and retail segments, there are opportunities for us in storage and tanker projects. Petrogas is specialized not only in retail sites but also in transport and storage. This diversification gives us an edge.

 

Q: What are your main objectives over the next 12 months? AZ: At the moment, our goal is to cover the demand for upgraded dispensers and installing vapor recovery system. This is a secure market at the moment and it is an area that requires a great deal of investment from gas station owners.  

We are also watching the development of the storage terminal industry, which is growing due to Mexico’s commitment to increase its storage time to eight days. This will create a fabrication market across the country and it is one that we intend to be involved in.

 

Petrogas Corporation is dedicated to the construction, equipment, maintenance, design and remodeling of gas stations. Petrogas has the confidence of companies such as PEMEX, Chevron, Gulf, BP, Shell and Mobil.

Peter Appleby Peter Appleby Journalist and Industry Analyst