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Mexico's Tuxpan fuel pipeline operating again -AMLO



By Argus

Petroleumworld 01 15 2019

Fuel should flow normally again to Mexico City soon as a pipeline between the Tuxpan port and the capital reopened after being shut almost a week as part of efforts to combat fuel theft, government officials said today.

"The pipeline has been working normally for three days now in order to satisfy demand in Mexico City and the metropolitan area in a few days we expect to return to normal," Pemex chief executive Octavio Romero said this morning.

Fuel shortages have arisen across the country in the past two weeks following the government's decision to combat fuel theft by shutting down key pipelines that have been subject to repeated illegal taps and shifting delivery of refined products to tank trucks. Authorities found 12,851 illegal taps in the first 10 months of 2018, according to data from Pemex.

The fuel shortage spread to Mexico City last week because of panic buying from citizens and a leak, which Argus confirmed was from an illegal tap, in the 103,000 b/d fuel pipeline connecting the port of Veracruz with the Azcapotzalco terminal in Mexico City.

"We cannot yet claim victory but there was an illegal tap almost daily until 11pm on Friday and since then, they have not been able to break the pipeline and I expect that they will desist in any further sabotage," Mexican President Andres Manuel Lopez Obrador, known as AMLO, said this morning.

Following reopening of the pipeline, fuel sales in Mexico City increased by 7.4pc to 11.6mn l on 11 January from 10.8mn l on 10 January, Romero said.

Nationwide fuel sales increased by 16pc to 136.4mn l during the same period.

Mexico currently has a 93,000 b/d fuels deficit but reopening of the Tuxpan-Tula, Brownsville-Reynosa-Cadereyta, Madero-Victoria-Cadereyta, San Martin Texmelucan-Valle de Mexico, Tula-Azcapotzalco, Salamanca-Guadalajara, Tula-Salamanca refined products pipelines currently operating at 76pc capacity will provide an additional 383,000 b/d, allowing Mexico to replenish fuel reserves in the coming days "that are practically in zero," said Romero.

Mexico imports most of its refined products from the US, more than doubling imported volumes of gasoline and diesel in the last five years as its domestic production has declined. Mexico imported 586,000 b/d of gasoline and 251,000 b/d of diesel in November. The government said it has continued imports during the shortage despite some delays in offloading cargoes because of full storage.

The government will roll out military monitoring to a further five pipeline systems; Tuxpan-Tula, Brownsville-Reynosa-Cadereyta, Madero-Victoria-Cadereyta, San Martin Texmelucan-Valle de Mexico and the Tula-Azcapotzalco jet fuel pipeline, General Arturo Velazquez said this morning.

More than 5,000 soldiers are currently in place guarding 1,600km (990 miles) of pipelines that include the six principal refined products pipelines across the country.

Mexico counts 56,000km of refined products pipelines, 6,000km of which are defined as critical for supply, Velazquez said.

The government's fuel theft plan is already bearing results, with gasoline theft down by 68pc to an average of 2.9mn l/d from 9.1mn l/d since the government's anti fuel theft strategy was launched on 20 December, Romero said.

Diesel theft has dropped by 89pc to an average of 300,000 l/d from 2.7mn l/d during the same period, while jet fuel theft has been eradicated since the anti-fuel theft strategy was launched from levels of about 700,000 l/d.

Three former Pemex officials, responsible for pipeline operations, have been charged with fuel theft, while a further 1,600 investigations are ongoing. The government has recovered 4.5mn bl of stolen fuels since the government launched its strategy in December, attorney general Alejandro Gertz said this morning.

Mexico's tax collection agency (SAT) has also identified potential tax inconsistencies of around Ps3.2bn ($168mn) in 194 retail fuel stations out of the 12,000 across the country, said SAT director Margarita Rios this morning. SAT is investigating more than 200 bank accounts linked to the fuels stations as a result.


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