KCS, Bulkmatic to develop liquid fuels terminal in Mexico

Kansas City Southern and Bulkmatic Transport Co. have signed a memorandum of understanding to form a joint venture investment that will facilitate and expand the export of liquid fuels from the United States to Mexico.

The project will include construction of a unit train liquid fuels terminal in Salinas Victoria near Monterrey, Nuevo Leon, in Mexico. Kansas City Southern de Mexico will serve the new terminal, KCS officials said in a press release.

KCS and Bulkmatic will invest $50 million over the next few years to develop the terminal, which is scheduled to begin limited operations in the third quarter and have storage facilities available in mid-2018 to provide retail fuel for the Monterrey area.

The 50-50 joint venture is a result of Mexico's 2013 energy reform legislation aimed at opening the nation's energy markets to foreign investment and the importation of refined energy products, including gasoline and diesel.

"The terminal will provide vitally needed refined energy products and boost job creation in the U.S. and Mexico," said KCS President and Chief Executive Officer Patrick Ottensmeyer. "The project neatly aligns Mexican energy reform goals with U.S. refining companies' desire to expand their operations into new markets."

The agreement will help create a "cost-efficient linkage between Mexican consumers and U.S. producers of refined products," said Bulkmatic CEO Alfie Bingham.