José Ángel Gutiérrez
Director of Operations
United Pipeline Systems
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Insight

Opportunities in Gasoline Storage

Wed, 01/20/2016 - 15:28

The success of companies depends on those running their operations, their knowledge of the industry, and their long-term vision, and PEMEX is no exception to this rule, according to United Pipeline Systems’ Director of Operations, José Ángel Gutiérrez. The company offers unique Tite Liner technology, and Gutiérrez shares that it is investing significantly in carbon fibers, emphasizing the importance of portfolio variety in providing an added value for the customer and subsequently gaining a competitive advantage. Now that the oil price has reached new lows, and the fact that PEMEX proceeds account for 30% of the federal budget does not create a problem, but rather opportunities for those that choose to see them.

“The last three years have been challenging,” Gutiérrez concedes, “but have served as an awakening, similar to the pinnacle of the dawning of the dot com era for the Mexican energy sector.” He explains that the major returns were always generated from drilling, and as a result, PEMEX made the largest investments in this area and overlooked other added-value industries in the midstream and downstream. “Now, all parties within the sector have motivation to make businesses profitable and sustainable, as opposed to PEMEX’s previous strategy of simply recruiting service providers without providing an incentive for productivity,” Gutiérrez explains.

Gutiérrez believes that the results of this reform will be seen in eight to ten years, but that the most benefit and improvement will be seen in the midstream and downstream industries, rather than in upstream. Firstly, though, he argues that mentalities must be changed within the sector, and instead of approaching PEMEX to repair a pipeline or sell a valve, United Pipeline Systems aims to focus on the investment and business model, serving as a partner for the NOC. Moreover, according to Gutiérrez, an important area of opportunity for newcomers to Mexico lies in storage. “With only 78 gasoline storage facilities in the country with a capacity of 7 million barrels, and a consumption rate of 1 million b/d, Mexico’s storage ability pales in comparison to the strategic reserves of the US federal government, totaling 850 million barrels,” he concludes.