VIEW FROM THE TOP
DIVERSIFICATION THE KEY TO SUCCESS NELLY MOLINA CFO of IEnova
Q: IEnova has been in Mexico since 1996. How are you
airports still need a reliable and secure source of jet fuel.
positioned today?
I think we may have the opportunity to take part in the
A: We see ourselves as first movers in Mexico. We went from
development of that infrastructure, similar to what we are
being the first private company working in the midstream
now doing in the gasoline and diesel markets. Since January
sector for both liquids and gas, to being the first energy
2017, we have executed five contracts for liquid fuel storage:
company listed on the Mexican Stock Exchange, our
three with Valero Energy, one with Chevron, and the last
commitment to Mexico is clear. Today we are one of the
with another world-class company. 313
largest private energy companies in Mexico. Nevertheless, it must be pointed out that for liquid product After being awarded the first permit for natural gas
pipelines to be effectively developed in Mexico, regulation
distribution in Mexicali, which represented an investment
may need to be adjusted to recognize who absorbs the
of US$20 million for the company, IEnova has grown its
inherent and associated risks of those projects.
total assets to US$8.4 billion as of March 2018. We have added a significant amount of investment by developing
Q: How important is the Sur de Texas-Tuxpan submarine
greenfield projects and through acquisitions. As a matter
pipeline for the country?
of fact, acquisitions have represented around 30 percent
A: We won this project in a transparent and competitive
of our growth during the last three years.
CFE auction, and we are developing it in a 40-60 percent JV with TransCanada. The pipeline will provide the country with
Our entire portfolio of projects provides an unleveraged IRR
additional direct access to natural gas from the US. Natural
of 9-11 percent, nominal, in US dollars and after taxes. The
gas demand has been increasing over the past five years,
diversification of our portfolio, in terms of both assets and
and we expect it will keep growing as power generation
customers, has been a key element to our success since it
becomes more dependent on this fuel. TransCanada is in
has ensured that our total IRR remains in our target range.
charge of the development of the project, and we expect it to start operations by the end of 2018.
In addition, IEnova went from depending on a single asset for more than 50 percent of its adjusted EBITDA generation
Q: Why did IEnova choose TransCanada as its partner for
to now having a broad portfolio, of which transportation
the project?
represents around 50 percent. This allowed us to grow
A: Our partnership with TransCanada is creating
adjusted EBITDA from US$300 million in 2013 to US$759
positive synergies because we have invested similarly
million in 2017.
in the country and have a long-term commitment to the economic development of Mexico and its energy industry.
Q: What potential does IEnova sees in the development of
When we look for partnerships, our objective is to find
pipelines and storage terminals for liquid fuels in Mexico?
complementary skills that we may not yet have developed
A: We see a great market opportunity in the development
ourselves. In the case of the Sur de Texas-Tuxpan pipeline,
of liquid product pipelines. There is need for infrastructure
we needed a partner that had previous experience in
to serve the growing demand of a market with 120
building marine pipelines.
million people and an inherent necessity for an open and economically viable liquid fuels market in the country. Beyond the clear need for pipelines to distribute and
IEnova , one of the first private companies to invest in the
transport gasoline, we also see a large market opportunity
Mexican energy sector, has made significant investments in
in jet fuel delivery to airports. This fuel is only delivered via
the country’s infrastructure for hydrocarbon transportation,
pipeline at the Mexico City International Airport, and many
distribution and storage, as well as electricity generation
