Huge Valero crude by rail expansion – Texas to Mexico

Dangerous oil trains moving along Texas gulf coastline – 30,000 barrels per day

Crude Summit: Valero grows Mexico rail flows

By Sergio Meana & Elliot Blackburn, Argus Media, 04 February 2020

Valero increased the volume of refined products sent by rail to Mexico last year to roughly 30,000 b/d, up from about 2,000 b/d just two years ago, chief executive Joe Gorder said today.

The US independent refiner reached into the recently-opened Mexican market through a combination of joint ventures with local partners and building out its own storage infrastructure, Gorder said during the Argus Americas Crude Summit in Houston, Texas. Valero railed gasoline and diesel from its Texas refineries, including four along the coast and its landlocked 200,000 b/d McKee refinery in the Texas Panhandle.

The company has six fuel storage agreements that give the company 5.8mn bl of storage capacity in Mexico, but fuel pipeline capacity is still constrained in the country and mostly only used by state-owned Pemex.

“We invested in some terminal assets,” Gorder said. “We have got joint ventures around several, and we are actually railing a lot of barrels into Mexico rather than waiting for the pipeline infrastructure to be built.”

Franchisees opened the first Valero-branded retail fuel station in Mexico last week, Gorder said, with two more now opened since. Valero in Mexico said it plans to open 15 retail fuel stations in the next three months.

For Gorder the US Gulf coast is the most efficient refined product center as it has an able and affordable workforce, access to feedstocks and multiple transportation options.

“We have got all the advantages to be a supplier to the world,” Gorder said. “It is going to be some time before [Mexico] will be able to satisfy their own demands if ever. And so it is a logical, natural market for us.”

Valero exported 343,000 b/d of fuels in 2019 to all markets.

Share...