Back to top

Image: Bigstock

Valero Inks Deals for New Refined Product Terminals in Mexico

Read MoreHide Full Article

Valero Energy Corporation (VLO - Free Report) recently entered into long-term accords to utilize three new refined product terminals in Mexico. The leading refining player will be able to expand its product supply chain once the Guadalajara, Monterrey and Altamira terminals commence operations in 2021.

For the Guadalajara and Monterrey terminals, the company signed separate joint venture agreements. Precisely, Valero inked agreements with Grupo México and Silos-Tysa for the Guadalajara terminal — with expected storage capacity of 900,000 barrels. For the Monterrey terminal — likely to have a storage capacity of 425,000 barrels — the accord has been signed with Grupo México.

Investors should know that as part of the deals, Valero will not be funding the construction of the Guadalajara and Monterrey terminals. The terminals will be receiving refined products through trains and trucks, after which Valero will distribute the volumes to local and regional markets.

For constructing the Altamira terminal — with expected storage capacity of 1.1 million barrels —Operadora de Terminales Marítimas will provide funds. As part of the agreement, Valero will have access to imported refined products from the second port facility. Notably, Valero will gain access to rail services to serve the inland Mexican markets, while truck loading facilities will be employed for distributing refined products to the local market.

Valero is also constructing three additional refined product terminals in the Port of Veracruz, Puebla and Mexico City. Notably, the three terminals, for which the company entered into long-term agreements in August 2017, will commence operations in 2020. 

Valero added that all the six terminals will have a combined storage capacity of 5.8 million barrels. This will help the company distribute refined product volumes to four of the largest metropolitan regions of Mexico and the country’s relatively smaller fuel markets.

Headquartered in San Antonio, TX, Valero currently carries a Zacks Rank #3 (Hold). Meanwhile, a fewbetter-ranked players in the energy space are Murphy USA Inc (MUSA - Free Report) , CNX Resources Corporation (CNX - Free Report) and Contango Oil & Gas Company (MCF - Free Report) . While Murphy USA sports a Zacks Rank #1 (Strong Buy), CNX Resources and Contango Oil & Gas carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy USA beat the Zacks Consensus Estimate in three of the prior four quarters.

CNX Resources has a trailing four-quarter positive surprise of 34.8%, on average.

Contango Oil & Gas is likely to see bottom-line growth of 87% in 2019.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Published in