KCS, Watco, WTC forge pact to expedite liquid fuel exports to Mexico

Kansas City Southern, Watco Cos. LLC and WTC Industrial announced a joint venture investment to aid and expand the exportation of liquid fuels from the United States to Mexico.

The project will include the construction of a unit-train liquid fuels terminal to be located in the WTC Industrial Park in San Luis Potosi, Mexico. Kansas City Southern de Mexico S.A. de C.V. (KCSM) will be the only railroad to serve the new terminal, KCS officials said in a press release.

The joint venture stems from energy reform legislation Mexico passed in 2013 to open the nation's energy markets to foreign investment and the importation of refined energy products, including gasoline and diesel, KCS officials said.

“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," said KCS President and Chief Executive Officer Patrick Ottensmeyer. "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 will invest $45 million in this phase of the project, which is expected to be completed in the second quarter. The project also is anticipated to eventually include a storage facility to provide retail fuels to Central Mexico.

“KCS looks forward to serving this major fluids distribution terminal in San Luis Potosi,” said Ottensmeyer. “It provides us with excellent cross-border line haul opportunities as well as moving product within Mexico on KCSM."

Construction on the new rail terminal at the WTC Industrial park is "well underway and on schedule," said Allen Roach, Watco’s senior vice president of network strategy.

"The location adjacent to the KCSM mainline ensures easy access to the terminal and quick cycle times of customer rail cars," he said. "The terminal is located in a Free Trade Zone, which provides an added economical advantage to rail shippers."

The terminal will support 24-hour, seven-days-a-week operations for secured, fully automated unit-train and manifest shipments, Roach added.