KCS, Watco, WTC announce joint venture for Mexico refined energy products terminal

Written by Kyra Senese, Managing Editor
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KCS

Kansas City Southern (KCS), Watco Companies, LLC (Watco) and WTC Industrial (WTC) have announced a joint venture investment through which they will facilitate and expand U.S. exports of liquid fuels to Mexico.   

 

The project entails building a unit train liquid fuels terminal to be located in the WTC Industrial Park in San Luis Potosi. Representatives say the new facility will be solely rail served by Kansas City Southern de Mexico (KCSM).

According to the statement, the joint venture is a direct result of legislation passed in Mexico for energy reform in 2013. The legislation was intended to move forward a process which will culminate by 2018 in the country’s energy markets being fully open to foreign investment and the importation of refined energy products, including gasoline and diesel.

“[KCS] is pleased to be part of this joint venture, which will expand the export of U.S. petroleum products to Mexico,” said KCS president and CEO Patrick J. Ottensmeyer. “Not only will the terminal provide Mexico with vitally needed refined energy products, it will also serve to boost job creation in both the U.S. and Mexico. This project perfectly aligns the goals of Mexican energy reform with the desire of U.S. refining companies to expand their operations and enter new markets.”

The joint venture partners are expected to invest approximately U.S. $45 million for this phase of the project, which is set for completion in the second quarter of 2017.  Representatives say plans for the terminal project outline the eventual inclusion of a storage facility that would provide retail fuels for central Mexico.

“KCS looks forward to serving this major fluids distribution terminal in San Luis Potosi,” Ottensmeyer said.  “It provides us with excellent cross-border line haul opportunities as well as moving product within Mexico on KCSM. We have a successful history of working with Watco and WTC, and we are excited about the chance to leverage each of our strengths to create the efficiencies and economies of scale that will benefit both the U.S. and Mexico. 

Allan Roach, Watco’s senior vice president network strategy, called the partnership a “best case scenario.”

“WTC Industrial has an existing, modern, state-of-the-art industrial park and construction of the new rail terminal at the park is well under way and on schedule,” Roach said. “The location adjacent to the KCSM main line ensures easy access to the terminal and quick cycle times of customer rail cars. The terminal is located in a Free Trade Zone, which provides an added economical advantage to rail shippers. The terminal will have 24/7 days a week secured, fully-automated operations for unit trains and manifest shipments.”

“Grupo Valoran (WTC Industrial) confirms the commitment of the private sector to supply fuel and chemicals in an efficient, safe and competitive manner to consumers in Central Mexico through this facility,” said Valoran chief executive officer Vicente Rangel Mancilla.

Valoran COO Jose Luis Contreras added, “Thanks to Grupo Valoran’s vast experience and leadership for over eight years with the Mexican Foreign Trade Zone, this terminal will work to simplify the logistic and import process to the benefit of consumers.”

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