Carlos Arriola Jiménez
Director General
Igasamex
/
Insight

Tailored Gas Distribution and Transportation Solutions

Tue, 01/22/2013 - 11:09

When Carlos Arriola Jiménez took over as Director General of Igasamex, his main goal was to accelerate the growth of the company. Even though the company has been in the gas industry for over 60 years, Igasamex had not been able to fully develop its natural gas distribution and transportation services until the opening of the gas market in the mid-1990s.

Today, Igasamex o† ers integrated solutions to meet the energy needs of industrial clients through a unique business model. “Our business model fi ts consumers that use natural gas as a strategic product, but are not large enough to have any real relevance for the CFE or Pemex. The di† erence between CFE, Pemex, and Igasamex is our ability to focus on the needs of our customers, especially because we do not service as many companies as they do and which in the end enables us to always fi nd the solution that meets our client’s energy needs,” explains Arriola Jiménez.

This kind of ‘need-based service’ o† ered by Igasamex is a success in Mexico because, under the current regulatory framework, permission for gas distribution is only given to companies delivering to end-users. Igasamex has managed to be successful because it meets the energy needs of its clients, particularly those that are based in locations that do not have access to natural gas distribution centers. “We facilitate a single window operation where we develop all the elements of the natural gas transportation process to deliver natural gas to our clients’ facilities. It all comes down to the economics of the project; if we would be working with a single customer and he has a relatively low usage of natural gas, the investment and the amortization of that investment would require us to charge fees that make natural gas an uncompetitive solution for their energy requirements, and that does not make sense,” Arriola Jiménez details.

For this reason, 80% of Igasamex’s services are o† ered in 12 states that currently have natural gas distribution infrastructure, like the Gulf coast, central Mexico, and Baja California. However, there is a large section of the country where infrastructure is currently undeveloped or non existent, such as the Pacifi c coast. While this seems like an obstacle for Igasamex, Arriola Jiménez has developed a strategy based on using road transportation of natural gas to develop new markets and reach new clients. “We are currently evaluating di† erent projects to deliver natural gas to sites that have not been served by pipeline transportation, and we expect within the next few months to start a road transportation operation to deliver natural gas to these locations,” he explains.

Besides expanding to road transportation of natural gas, Igasamex is constantly monitoring pipeline infrastructure projects for opportunities to expand infrastructure and services, lower gas prices, and attract more foreign investment. “Expanding natural gas infrastructure in Mexico creates value for the country since manufacturers are deciding to relocate here because of the competitive natural gas price,” claims Arriola Jiménez, who adds that even though it is always risky to talk about the future with a sense of certainty, the North American natural gas market is likely to remain competitive in the long run. Mexico is a great option for foreign companies that operate manufacturing facilities, not only because of cheap gas prices, but also because of our proximity to the US and the competitiveness of our labor costs. “The sum of these factors makes a very interesting case for investing in our country right now, and I would like to underscore the important role natural gas plays,” says Arriola Jiménez.

Furthermore, Igasamex has a very ambitious goal of entering the transportation and distribution market for Liquefi ed Natural Gas (LNG), even though it might seem somewhat radical and risky. Arriola Jiménez believes that the current stage of the gas market creates opportunities for his company to be creative and to think about things that traditionally have not been seen. “The need is there and I think we are the right partner to provide solutions with regard to LNG distribution and transportation. We would like this project to materialize, because traditionally 100% of our business is delivering natural gas through pipelines to industrial end-users, and this project would be a huge step forward to develop new growth platforms,” he concludes.