Positioned for EPC leadership in Mexico

Mexico

Daniel Hernández Trejo, Gulf Companies’ managing director for Latin America, talks to The Energy Year about the company’s expansion in the Mexican market and the strategic gains it has made through its acquisition of Summum Projects Mexico. Gulf Companies offers EPCM services in various industries.

What important expansion steps has Gulf Companies taken in Mexico?
Gulf is a company with a 70-year history in the energy market in the United States but also has an important track record working on projects internationally – from the Middle East to Latin America. However, in the last decade, the company had been focusing on ventures revolving around the shale gas boom in the US. This situation has recently changed, and our new strategy includes seeking to grow our presence in countries in the Middle East and in Latin America.
To an extent, one could say that entering the Mexican market is the first step towards conquering the rest of the markets in Latin America. Mexico has become essential in our regional growth strategy.
Although we have had a presence in countries in Latam in the past, and have a presence now through our participation in energy projects in Peru, our regional expansion strategy is more extensive than this, with Mexico being our key market when reactivating our business in the region.
In mid-2024, we successfully acquired Summum Projects Mexico, a prominent engineering services firm based in Mexico. This strategic move marks a significant step forward for us in terms of strengthening our presence in Latin America and unlocking new opportunities in the energy sector.
Both companies share similar skills and values, as well as a common vision of delivering world-class engineering services for energy infrastructure and renewable energy projects, while also complementing each other’s range of services. This strategic acquisition marks a significant milestone in Gulf Companies’ expansion efforts in Mexico and the Latam region.

Can you tell us more about your acquisition of Summum Projects Mexico?
Gulf is a company that has experience developing mainly midstream projects. We are exceptional at carrying out pipeline engineering and other services for the midstream sector such as conceptual studies, rights-of-way, geographic information (GIS) data management, hydraulic studies and construction management. Additionally, we are able to carry out turnkey solutions, taking on complete EPC works.
Summum Projects Mexico has been providing project management, engineering and construction inspection services in the Mexican market for 15 years. It has experience in the downstream sector and the power-generation sector in Mexico and Latam. These are areas where Gulf Companies have a direct interest in further developing in the Latam region and other geographies where we operate. We especially see a resurgence of gas-fired power plants in the US where these credentials and experience from Summum will be very valuable, which is why this acquisition is strategic for us.
As a consolidated entity, our clients now benefit from vast expertise and gain access to a broader range of innovative technologies. We now have combined capabilities. Moreover, the acquisition of Summum adds capabilities that we did not have before, for example, in industrial plant development, and gives us access to a larger pool of clients in Mexico.

What capabilities and qualities does Gulf Companies bring to the Mexican market?
Two of the most important qualities we bring to the market are FEED and conceptual engineering. Having a strong engineering background at the start of the project can determine whether or not the project will be viable. Even though these phases have a lower cost compared to the overall capex of a project, they have a large impact on the final cost and schedule, which is why it’s important to have an experienced and qualified engineering partner help clients make the best decisions during the early stages of a project
We want to position ourselves as a key ally and consultant for clients undertaking large-size EPC projects. We believe we can make the difference when it comes to having a successful and profitable project.
When it comes to the size of projects we can handle, it depends. Summum alone could take on smaller engineering, subcontracting and procurement projects between USD 5 million-10 million. The company also engaged in multi-year projects of up to USD 50 million.
Now, with Gulf and Summum consolidated in Mexico, we can handle EPCM projects of up to USD 100 million-150 million including construction management and commissioning. We currently have the staff and the capabilities to carry out the management of a project of that size and calibre.

What projects are you currently carrying out for Pemex?
Pemex is an important client for us. Currently we have two large framework contracts with them. One involves the engineering of land infrastructure and field surveys for wells in the Villahermosa area for PEP [Pemex E&P]. This contract has a value of around MXN 484 million [USD 23.3 million], and its duration extends until mid-2025.
The second contract is for land works, which is very similar to the former. By Q1 2025, we will finish this project.
Our objective now is to diversify our portfolio of clients and add new private firms to help them develop their projects. Developing these relations and successfully acquiring projects within the private sector will be vital to our success in the next few years. However, we acknowledge the importance that Pemex has in the development of the energy industry in Mexico, and we still want to be a key ally of theirs.

What types of energy projects are you looking to participate in?
In Mexico, we would like to focus on the current energy needs of the country. We see great potential and opportunities in the area of electricity generation. There has been a great emphasis on combined-cycle power plants, and we want to be an important actor contributing to their construction. We understand that public-private collaboration is essential, and this collaboration will bolster the activities of Pemex and CFE for key projects in the country.
Likewise, there are ambitious goals to develop the renewables sector in Mexico. We can definitely contribute to these ventures, providing, for example, services such as civil and electrical engineering for wind farms and substations. We have already provided services for renewable energy projects in the US, so we can apply our experience to projects in Mexico as well. We are one of the leading contractors developing engineering for Carbon Capture Utilization and Storage (CCUS) project and also have expertise in in hydrogen projects. Although these industries are still underdeveloped in Mexico, we stand ready to help our clients.
As for CCUS, we are pioneers in the US with respect to the transportation and injection of CO2. We are developing the Midwest Carbon Express Pipeline System, which is the largest CCUS project in the world, including 2,570 miles [4,136 kilometres] of pipelines and 14 pumping stations that transport captured CO2 from 57 ethanol and fertiliser facilities to Class VI sequestration wells in North Dakota.
We have the expertise, and we are ready to develop any project of this nature here in Mexico, when the time comes.

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