PEMEX to Purchase Tuxpan Storage Facility
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PEMEX to Purchase Tuxpan Storage Facility

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Perla Velasco By Perla Velasco | Journalist and Industry Analyst - Wed, 05/17/2023 - 09:22

PEMEX is planning to purchase Monterra Energy’s Tuxpan storage terminal for US$320 million, according to data from Bloomberg. KKR’s Mexican subsidiary, Monterra Energy, founded after the energy reform of 2014 has faced different obstacles in light of changes in regulation carried out by the current administration. 

Monterra’s 2.2MMb fuel import terminal was closed for almost a year after it was inspected in 2021. The facility was closed at gunpoint on Sept. 14, 2021, by Mexican regulatory authorities and the National Guard. Since then, it has not been allowed to operate. 

A year later, February 2022, the company threatened to sue Mexico under international arbitration. Monterra Energy notified the Mexican government of its intention to launch international arbitration under NAFTA and USMCA for the suspension of operations in Tuxpan, Veracruz.

This was another instance of discontent related to Mexico's violation of USMCA agreements concerning energy policy.  Monterra investors seek US$667 million in compensation, plus interest and legal costs.

At the time, Monterra Energy issued a public statement making it clear that there was no legal reason for this closure, since the terminal had been fully compliant with all standing SENER regulations.

Mexican energy policy has faced complaints from the country’s northern trade partners, who argue that it creates unfair competition against state companies in the country. President López Obrador has stated that his administration seeks to strengthen state-companies in the name of sovereignty.

While the US, Canada, and other stakeholders have expressed their support for Mexico's self-determination, they have also voiced concerns about the extent to which this policy may impede further development in the country. Specifically, concerns focus on Mexico's energy transition targets and its capacity to leverage the nearshoring trend. Additionally, PEMEX's debt is a significant source of worry due to López Obrador's energy self-sufficiency objectives and the impediments imposed on private players in order to favor the NOC.

Photo by:   Elxeneize

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