Tag Archive for: Hydrocarbons Sector

Chevron signs contract for refined fuels terminal in Mexico

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Hydrocarbons Technology / September 17

 

Chevron Combustibles de México has signed a long-term contract with Sempra Energy’s Mexican subsidiary, Infraestructura Energética Nova (IEnova), to use 50% of the initial capacity of the proposed Topolobampo refined fuels marine terminal.

IEnova is developing the refined fuels terminal in Sinaloa, Mexico, with an initial capacity of one million barrels.

Pursuant the contract, subsidiaries of Chevron will have storage capacity of 500,000 barrels of refined fuels.

In addition, Chevron will have an option to purchase up to 25% of the equity in the terminal following the commencement of commercial operations.

IEnova also signed a contract with an undisclosed US refiner for the remaining 50% of the facility’s initial storage capacity.

“The Topolobampo project provides an important supply source of refined fuels for Mexico.”

IEnova executive chairman Carlos Ruiz Sacristán said: “The Topolobampo project provides an important supply source of refined fuels for Mexico. Together, working with our customers, this terminal will increase reliability of supply, create jobs and provide benefits to millions of Mexican consumers.”

IEnova received a 20-year contract in July this year from the Topolobampo Port Administration Terminal to develop, construct and operate the marine terminal in Sinaloa.

The terminal involves an estimated investment of $150m and is expected to become operational in the fourth quarter of 2020.

Last week, IEnova reached a deal to allow British Petroleum to use 50% of the one-million-barrel initial capacity of the refined fuels Baja Refinados terminal, which is to be constructed in Baja California.

Earlier this year, Chevron booked the other 50% initial capacity of the Baja Refinados facility.

 

Hydrocarbons Technology / September 17

 

The regime of strict liability in the activities of Exploration and Extraction of hydrocarbons

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The General Administrative Provisions that establish the Guidelines on Industrial and Operational Safety and Environmental Protection to carry out the activities of Surface Recognition and Exploration, Exploration and Extraction of Hydrocarbons (DACG/E&E), were published in the Official Gazette of the Federation, issued by the National Agency for Industrial Safety and Environmental Protection of the Hydrocarbons Sector (ASEA), established  that those who carry out works or activities for the exploration and extraction of hydrocarbons are subject to a regime of strict liability, that is, they operate under the assumption that they are creating a risk to people and the environment and, therefore, in case of causing damage they must carry out its repair, without this being conditioned to prove their fault.

 

Derived from the above, ASEA imposes on operators the obligation to perform all actions necessary to prevent environmental damage arising from the risks created, for which they must contain, characterize and remedy them with opportunity under their own processes and according to the applicable legislation and regulations.

 

In this sense, the “DACG/E&E” establish that Exploration and Extraction activities must be carried out under certain principles, such as:

 

  1. Minimize the risks at a level that is as low as reasonably possible, that is, up to a level where it is demonstrated that the cost of continuing to reduce that risk is greater compared to the economic benefit that would be obtained. This allows a reasonable balance between economic activity and the protection of third parties and the environment.
  2. Regularly review the risk reduction measures in order to update them based on the technological development and specialized knowledge.

 

  1. Implement emergency measures and foster a culture of the protection of people, the environment and facilities.

 

The aforementioned principles are aimed at preventing the accidents from happening, so they must be complemented with measures that have as their object the repair and / or compensation of the damages caused by the an accident.

 

One of the most effective measures to achieve this is to have financial instruments that allow for the consequences of the materialization of risks, such as an insurance.

At NRGI Broker we are experts in insurance for the Exploration and Extraction of Hydrocarbons. Come to us.

 

The strategic value of the pipelines

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The Five-Year Expansion Plan of the National Integrated Natural Gas Transportation and Storage System 2015-2019 contemplates the construction of more than 5,000 km of natural gas pipelines, with an estimated investment of close to 10,000 million dollars. For its elaboration, the National Infrastructure Program 2014-2018 was taken as a basis, in which the gas pipeline construction projects are planned, with an approach that seeks to guide the integral functionality of the new infrastructure of the country.

On the other hand, the main objective of the Quinquennial Plan is to bring natural gas, considered the most efficient fuel and of intensive use, to different areas of the country, among which are Hidalgo, Puebla, Veracruz, Aguascalientes, Durango, Michoacán, Guerrero, San Luis Potosi, Chihuahua, Sonora, Oaxaca, Tamaulipas and Nuevo Leon, especially in industrial areas and those where up to now this hydrocarbon has not been accessed.

The foregoing is in line with one of the objectives of the Energy Reform, consisting of the safe, reliable and competitive supply of natural gas.

These new gas pipelines will be added to the more than 10,000 km already existing, and will increase the capacity of transportation of natural gas by 50%.

It is worth mentioning that the expansion of the gas pipeline network can bring with it a greater possibility of accidents, considering that the pipelines are one of the means of transport that present a greater frequency and severity of accidents, due to the fact that they are exposed to various hazards as: explosion, fire, natural phenomena and ill-intentioned acts.

Therefore, it is very important that during the construction and operation of the pipelines, the insurance coverage is adequate for the complexity of this means of transport, for which it must be taken into account that the damages may affect the infrastructure, people, their assets and the environment.

In NRGI Broker we are experts in designing comprehensive insurance schemes for the Hydrocarbons Sector, come to us.

 

Risks in the Hydrocarbons Sector

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A risk, according to the Law of the National Agency for Industrial Safety and Environmental Protection of the Hydrocarbons Sector (ASEA), is the probability that an undesired event will occur, measured in terms of its consequences to personnel, to the population, to facilities and equipment and the environment. In short, a risk is the probability of an accident occurring.

In this regard, it is important to consider that “risk” is not synonym to “danger”, since the latter refers to the intrinsic conditions or characteristics of an object capable of causing harm, while the risk is the probability of that damage occurring. From the above it follows that there are situations and objects that are dangerous themselves and therefore have the potential to cause harm, that is, they represent a risk, which however can be controlled and minimized.

In terms of hydrocarbons, oil and gas are hazardous materials, given their explosive and flammable characteristics. Therefore, the activities in which they are involved represent a risk, hence they are legally defined as highly risky activities.

In addition to the intrinsic characteristics, the operations carried out throughout the hydrocarbon value chain are highly complex, since 1) they involve large-scale infrastructure: drilling platforms, ship-tanks, pipelines, storage terminals, others; 2) are carried out in conditions that may be extreme, for example, drilling an oil well in the sea or traveling long distances through a ship or a train; 3) Advanced technology and specialized personnel are required.

Derived from the above, it is necessary to take all the measures in risk management to avoid accidents from happening. However, although a risk can be prevented and controlled, it can not be eliminated completely, so in any case, it will be necessary to transfer it, with the aim of preventing a company from absorbing the total economic losses that a loss may represent and that they can translate into a significant patrimonial detriment.

A risk can be transferred to an insurance company, through an insurance contract in which the insurer is committed to the insured, who in return for a premium, will indemnify him in case he suffers a loss that causes losses economic, as long as the event corresponds to the insured object, conforms to the terms and conditions established in the policy and is not an exclusion.

In the SectorHydrocarbons Sector, there are specific insurances to cover the risks inherent to this activity, which have also been established as mandatory by the regulatory authority (ASEA), such as: 1) Well control; 2) Civil Liability and 3) Environmental Responsibility.

At NRGI Broker, we are experts in insurance for the Hydrocarbons Sector. Come to us.