The Business Year

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Complementary North American markets and energy reform create abundant opportunities for energy infrastructure development in Mexico.

Fernando Calvillo Alvarez

President & Chairman of the Board, Fermaca

ın the hydrocarbon sector, there is currently a lack of infrastructure. The most important activity after the production of crude oil is refining, and Mexico’s current refining capacity is no more than 1 million bpd. If we do not want to continue to import, one of the major changes should be in refining. Second, another area that should be looked at is pipelines. They are the main driver of an efficient energy industry to move crude oil, LPG gas, natural gas, and refined products. We always seek opportunities, though there is still a great deal to do in Mexico, and there are many possibilities. We have the US as a complementary market and already have assets there. Mexico will become a net importer of gas, and we should focus on the US to bring more gas from production centers to Mexican markets. We have to complete construction of our platform and hopefully by 3Q2018 we will have gas flowing all the way from Baja California to Guadalajara. We would like to continue expanding our network, and Fermaca will be active in liquids, which is where we are heading. Even though there is a tense political climate, Mexico is mature, and for investors, this country is a safe bet.

Michael Ross

Managing Director, Kiewit Mexico

The rationale for Kiewit coming to Mexico all grew out of the energy reforms. We saw that with those changes, there could be many excellent opportunities for Kiewit in Mexico. Furthermore, several of our customers in the US and Canada were already coming to Mexico based on the energy reforms and were in touch with us to see if we could be of assistance. Based on that, we came down and started looking around and liked what we saw in terms of the reforms and companies here. It was all positive, and it made sense for us to explore opening an operation here in Mexico. Mexico needs all the things that Kiewit likes to design and build, including power plants, oil and gas facilities, roads, bridges, and mining facilities. Everyone in Mexico seems to agree that there is a need for additional hydrocarbon storage. We look at our bid prospect list, and there are more fuel terminals on the list of things to bid than anything else. We find many opportunities to bid for work in that area. The new players in the retail market coming into the Mexico market such as BP, Shell, Chevron, and Total want to have the ability to import their own fuel and control their own supply, and that all results in additional fuel terminals.

Kevin Piccolo

General Director, Kevin Piccolo

The energy division, despite being relatively young, is extremely successful. We started with engineering, procurement, and construction (EPC) projects in the electricity sector. We have worked for both the public and private sectors. We decided to invest in generating electricity using co-generation plants. We deliver electrical and thermal energy to an anchor customer and have surplus electricity that goes to the grid. We handle everything with power purchase agreements (PPA). Today, we have two plants. We offer clean energy because our co-generation is efficient. Additionally, our rates are lower than those of the Federal Electricity Commission’s rates. We signed an agreement with Siemens for small gas turbines of 5-15MW that are used for co-generation projects. Siemens will deliver the turbine engines, and we will assemble in Mexico all the packages that integrate the generator, such as the cabin, ventilation, and fire system. Regarding solar energy, we are evaluating the acquisition of a 10-MW project to develop it into a solar park by the end of 2018. Solar energy will be significant in the Mexican market. The efficient co-generation we developed under the old law was considered clean energy, and our customers are exempt from the purchase of clean energy certificates.



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