Promise in transition fuels

Mexico

Rajan Vig, CEO of Indimex Marketing and Trading, talks to The Energy Year about the opportunities the company sees in transition fuels and its imports of US fuel into Mexico. Indimex Marketing and Trading markets and trades refined products and liquified gases and invests in and operates physical assets in Mexico and the US.

What opportunities does Indimex see in transition fuels?
Indimex has focused on refined products and liquid gas. However, we are now looking at transition fuels, namely LNG and methanol. We’ve been very keen on looking at different transition fuel projects and how we can capitalise on opportunities in this area by commercialising the molecule or even building LNG or methanol infrastructure.
Methanol in particular has great potential, being untapped compared to LNG, which is a market that is already quite developed in the US. In the past year, more methanol ships have been ordered globally than during any other year in history.
Moreover, regulatory shifts seen, for instance, in IMO directives, have ramped up efforts among maritime players to reach net zero. The maritime sector tends to lead in terms of effective sustainability efforts, which then permeates to other sectors. Consequently, at this point in time, methanol seems to be the most viable transition fuel we can commercialise.
However, we want to go beyond simple commercialisation. We are also interested in taking advantage of assets. This means we would invest in infrastructure to produce the actual molecule and also to commercialise it. Thus, the scope of our interest and expertise goes beyond being a mere trader.

What opportunities do you see for PPPs?
Pemex and the CFE [Federal Electricity Commission] have shown a willingness to advance PPPs, so there will surely be more opportunities to work with these state-owned companies. For example, there might be opportunities for potentially purchasing locally produced products from Pemex and the CFE to then commercialise them together, as long as there’s an incentive for them. We could also form alliances to jointly optimise assets.

What new initiatives is Indimex undertaking regarding the import of fuel products from the US into Mexico?
Despite losing access to permits a few years back, in 2024, through one of our partners, we managed to attain the necessary permits to import and distribute fuel in Mexico again. We are currently working to attain a rail fleet of about 800 railcars. This is quite ambitious because there are not many railcars being built at the moment.
With railcars, one can bring in far greater volumes of product than by truck. There is less exposure to extortion and theft at the border, and it is a much safer and faster option overall, despite it being initially more expensive.
We have two other partners in this venture, but Indimex will be in control of managing the fleet and the fuel supply coming into Mexico. Our partners will handle the investment and selling to our clients in Mexico. Our strategy is to provide a holistic service for our clients.
Our products come both by rail and truck. By rail, we are mainly moving diesel, gasoline and naphtha. We focus on the traditional gasoline and diesel markets on the railcar side. By truck we move naphtha, ethanol and methanol. The majority of products we move into Mexico are moved through the Texas-Matamoros border, but where exactly we cross depends on the delivery point.

How are you diversifying your product portfolio while adapting to the different needs of the market?
We work with several transloading terminals in Mexico. Many of these terminals lost their permits a few years back. There are only 12 transloading facilities we can work with. From these we transfer the product to then deliver it to our clients. The majority of them are white-flag gas stations. As of today, we are moving around 100-200 railcars a week carrying diesel and gasoline.
We are now also looking at opportunities in the jet-fuel space. It is still early to say, but we believe this space has a very high potential.
Overall, we are looking at diversifying our product portfolio. We have entered the petrochemicals and chemicals arena, where we have recently signed agreements with a national petrochemicals company, and we are now moving petrochemicals, glycols and high-quality pale oils for different consumers.
It is a very niche business and is different from traditional diesel and gasoline. Mexico has a high consumption of chemicals, which has made it a very interesting area for us.
Given the experience we have and the needs the market has for natural gas, especially the need to feed power generation assets, which today consume 60% of the gas imported into the country, we are looking to set up a natural gas commercialisation desk in Mexico.
The idea is to purchase natural gas from the US, transport it through pipelines into Mexico and then sell it here. However, we would have to sell it to the government, buy it back and then supply it to the client.
Another alternative would be to get a share of the profit once the government delivers the gas to our clients. The clients we are looking at would be power plants and entities with high electricity needs, such as industrial plants and meat producers.

What medium-term strategy does Indimex propose for upgrading Mexico’s fuel infrastructure?
Our medium-term goal is to improve infrastructure in Mexico for the final consumers, for Mexicans. While our ultimate goal would be to build our own storage infrastructure and to own and operate it, we also believe that we need to work hand in hand with Pemex.
A viable option would be to share storage capacity with Pemex and help optimise the storage and logistics business across the country. We want to be part of a market where Pemex is still strong and work together with them.
Mexico’s topography is complex, making it very difficult to deliver to all customers. The demand is increasing, which means that public-private collaboration to deliver to end users is essential. There is no reason why we can’t work together. Together we’re stronger. So, our objective is to work alongside the government to upgrade the value chain of Mexico’s midstream and downstream sector.

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