Mexico’s poor pipeline infrastructure is favouring the use of rail freight for US refined fuel imports, due to cars’ rising consumption and outdated refineries which cannot cope with demand, claims a report.

Bloomberg says the US exported refined fuel products worth 20 billion US Dollars in 2017, and this is expected to increase in the short-term due to the lack of investments in its national refineries.

Investors

At the same time, there are only two big Mexican ports prepared for massive refined fuel imports, at Lazaro Cardenas and Veracruz. Its road network is also outdated and has to contend with a large amount of robberies. These weak points have attracted many investments into the rail freight sector, especially by American investors.

First, US company Kansas City Southern (KSC) is developing improvement works in the rail tracks between Monterrey and Matamoros and in the rail bypass in Celaya, a key corridor between Lazaro Cardenas port and Mexico City. Second, oil giant Exxon Mobil also started contracting large rail freight trains for US fuel imports in December, as it considers this mode of transport safer and more efficient.

Shipments

Finally, Rangeland Energy is building a rail freight terminal in Corpus Christi, Texas, for fuel shipments to Mexico, and Jefferson Energy is operating a rail-served terminal in Beaumont, also in Texas, to move refined products to Mexico.