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US ethanol association supports ethanol retailers in Mexico

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The American Coalition for Ethanol (ACE) has shared technical information with prospective retailers in developing a market for ethanol in Mexico.

The association’s senior vice-president Ron Lamberty recently spoke at the first technical ethanol information forum held in Juarez, Mexico, near El Paso in the US state of Texas.

The forum was one of many to be run under a joint effort by the US Grains Council (USGC) and the Mexican Association of Service Station Suppliers (AMPES) to inform Mexican petroleum marketers about the opportunities in sourcing, marketing and retailing ethanol blended fuel.

“Juarez is one of the top destinations for US ethanol in the short-run because El Paso and Juarez are basically one large metropolitan area, divided into two different countries by the Rio Grande,” explained Lamberty. “El Paso has a two-billion-gallon refinery and Kinder Morgan and Magellan fuel terminals already supply stations in Juarez and other cities in the state of Chihuahua. Ethanol is already in those terminals, and some E10 has already been purchased and delivered to stations in the area.”

The Mexican Government has recently started to deregulate the petroleum market, which is encouraging retailers to express interest in incorporating ethanol blends into their fuel. Pemex, Mexico’s state-owned oil company, has even indicated that it may be interested in blending ethanol with gasoline.

“Last month, Pemex’s proposed budget for 2020 included $50 million (€45 million) towards reconfiguring terminals to handle ethanol,” Lamberty continued. “The original project, which Pemex stopped in 2008, called for 5.8% ethanol in Magna (regular) gasoline, and if the same timeline is used, Pemex could be buying 50 million gallons of ethanol a month sometime late next year.

“Although nothing is certain, this is encouraging news and the USGC team in Mexico is doing a great job helping Mexican ‘gasolineros’ understand adding ethanol is a way for them to make more money while offering customers a cleaner, higher octane fuel at a lower price.”

He added that it is likely that some of Pemex’s own customers are pressing them on the ethanol issue.

“When ACE, IRFA [Iowa Renewable Fuels Association] and USGC brought some key Mexican fuel marketers to Iowa to give them an up-close look at how easily ethanol can be incorporated into the fuel supply, they wanted to go back and find a way to add ethanol to their fuel slate,” Lamberty added.

“Most of those companies buy their fuel from Pemex and Pemex still supplies probably 90% of the stations in the country. But, they’re not the only game in town anymore. If their customers ask for ethanol, Pemex will have to find a way to get it to them, and there are plenty of people who can help them add ethanol to Mexico’s gasoline.”