This sub-sector research report presents the market for gasoline storage and distribution equipment based on the budget allocated to Pemex (Petroleos Mexicanos - the Mexican government owned petroleum company) Refining for the next two years. It will also cover various options for U.S. manufacturers and service providers to sell to Pemex Refining and Pemex registered suppliers, including large contractors.
Mexico’s total market in 2011 for gasoline storage and distribution equipment was US$824.2 million and is expected to increase to US$857.0 million by the end of 2012. Market growth is expected to continue into 2014. U.S. companies claimed 53% of the total import market in 2011 and are expected to reach 54% of the total import market at the end of 2012.
Pemex is governed by Mexico’s Public Works Law. To sell equipment and services to Pemex, under a national, international, or by invitation only tender, companies are required to be registered as suppliers.
At the end of 2011, Pemex was considered the 5th largest crude oil and the 11th largest natural gas producer in the world. Pemex’s Refining subsidiary is the second largest area within Pemex’s budget (Pemex Exploration and Production is the first) for the issuance of tenders on gasoline storage and distribution equipment projects in which small, mid-sized, and large Pemex contractors can participate.
Pemex’s 2011 infrastructure for gasoline storage and distribution included: 6,000 km of gasoline pipelines; 77 storage and distribution terminals; 3,963 gasoline heavy transportation vehicles (1,324 owned by Pemex and 2,639 owned by private companies that have the concessions to transport gasoline to the gasoline stations); 894 light transportation vehicles (525 owned by Pemex and 369 owned by private companies that have concessions to transport gasoline to the gasoline stations); and 9,232 gasoline stations. At the end of 2011, Pemex had six refineries that produced over 424,000 barrels of gasoline per day. Pemex produces and sells three brands of gasoline: Nova, Magna, and Pemex Premium.
Pemex’s reports indicate that at the end of 2011 Mexico was importing 40 percent of its gasoline demand from companies in the U.S., Spain, France, Netherlands, Belgium, Switzerland, Italy and Brazil. Pemex has had an alliance since 1993 with Shell at the Deer Park Refinery in Texas that produces 180,000 barrels per day of gasoline that Pemex imports.
The market for gasoline storage and distribution equipment and services is expected to grow at an average of 4.0% from 2012 to 2014 (Table 2) due to priorities set by Pemex to 1) continue the modernization of its gasoline storage and distribution equipment, and 2) refining to reduce the need for imported gasoline.
The figures in Table 2 also estimate that the total market will increase from US$824.2 million in 2011 to US$857.0 million by the end of 2012. According to Pemex Refining, 80% of the demand for gasoline storage and distribution equipment will be imported by large contractors for turn key projects announced in national, international, and by invitation only tenders. 20% of the demand will be supplied by representatives and distributors of gasoline storage and distribution equipment with offices in Mexico. Total imports are expected to increase by 4% from 2011 to 2012.
Pemex’s Refining will be contracting over US$10.2 billion between 2012 to 2014 in gasoline storage and distribution equipment from international and domestic companies. Thus, the market demand from manufacturers, representatives, and distributors of gasoline storage and distribution equipment is estimated to increase by 4.0%. Total imports of equipment from the U.S. to Mexico are expected to increase 6.0% from 2012 to 2014.
The following is a short list of the gasoline storage and distribution equipment and services that will have the greatest demand during the next five years.
Gasoline pipe, blasting drilling equipment, rock bit adaptor, directional drilling bits, gasoline pressure regulators, mounting brackets, multi valves, relief valves, external relief valves, excess flow valves, bypass valves, compressors, back pressure valves, oil-free gas compressors, hand pumps, vapor meters, , level indicators, flexible connectors, copper tubing, tube cutters, flaring tubes, mechanical couplings, coating strippers, bearings, brass precision needle valves, brass fittings, leak detectors, gas detectors, tools for the installation of gasoline pipelines; tools for boring or broaching; tools for turning of base metals; interchangeable tools for hand or machines; pumps fitted with measuring device; hand pumps fitted with measuring devices; concrete pumps; rotary positive displacement pumps; boring or sinking machinery; pressure-reducing valves; check valves; surveying instruments; test benches, etc.
In 2011 Pemex Refining invited companies to bid on the construction of a new refinery. In February of 2012 the project was awarded to the contractor ICA/Fluor Daniel that initiated the engineering work for the refinery in March 2012. The refinery is estimated to be completed by 2016 and will produce over 250,000 barrels of gasoline per day. The estimated cost of the refinery is US$6 billion. ICA/Fluor Daniel executives estimate that 40 percent of the equipment to complete the projects will be imported.