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Increasing Energy Infrastructure In Mexico

Author:Mr Bruno Vera Stephens and Vivian Klapp Sasson
Profession:Rodríguez Dávalos Abogados

In recent years, the need for storage capacity in Mexican ports has increased significantly considering the ever-changing conditions of the energy industry. The vast majority of traffic has been made through four strategic locations: two ports in the Pacific coast, (Manzanillo, Colima and Lázaro Cárdenas, Michoacán) and two ports in the Atlantic coast (Altamira, Tamaulipas and Veracruz, Veracruz). The Ministry of Communications and Transportation ("SCT" for its abbreviation in Spanish) has set as a purpose, through the National Plan of Development, that the aforementioned ports should become International Class Ports. Therefore the SCT is prompting their respective Port Authorities to begin the process of modernization and expansion through public bids and to increase the storage capacity of these four ports as well as their draft port to allow access for bigger vessels.

Likewise, Mexico's Ministry of Energy ("SENER" for its abbreviation in Spanish) has set as a purpose, the increase of hydrocarbons storage capacity. This aims to build a reliable and sufficient inventory of hydrocarbons, ensuring an uninterrupted supply for a certain amount of time. Accordingly, the SENER along with the Energy Regulatory Commission ("CRE" for its abbreviation in Spanish) , established as a preliminary statistic measure, the obligation for all permit holders to report periodically all handled volumes to inform to the public the market conditions. The aforementioned obligation is of particular relevance for the economic agents (trading and distribution permit holders of the energy industry that trade or distribute gasoline, diesel or jet fuel products to final users or retail stations. SENER appoints these permit holders as the first ones to be bound to have minimum storage inventories.1 The purpose of the periodic reports is to determine an average of handled products for each economic agent and establish, based on that average, their individual minimum storage obligations during consumption days. The creation of commercial inventories will allow uninterrupted supply in the event an interruption on imports or in case other emergency arises. The ultimate beneficiary of an uninterrupted supply would be the final users or retail stations.

On September, 2015, Mexico, in alignment with the then recent 2013 Energy Reform, expressed interest in joining the International Energy Agency (IEA). It aimed to increase private investment within the energy industry and to assist in further developing its energy market. On November 7TH, 2017, the IEA formally invited Mexico to...

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