Monterra threatens to sue the Mexican government for at least 667 million dollars

After the operation and progress in the work of the storage terminal for 2.2 million barrels of fuel in Tuxpan, Veracruz, the company created after the 2013 reform, was stopped since last September 14, Monterra Energybased in Houston, announced that it intends to sue the Government of Mexico for at least 667 million dollars.

According to an “intention to initiate an arbitration process” sent to the Ministry of Economythe investors of Monterrawhich is owned by the investment fund founded in New York, KKR&Coseeks to recover the value of its fuel storage terminal in Tuxpan, in addition to adding interest and legal costs to the Mexican administration, although it could reach a financial agreement in this regard.

Until before the Covid-19 pandemic, the project of Monterra which was one of the most advertised after the 2013 energy reformwas 50% complete in the port of Veracruz, with the aim of reaching a capacity of 2.2 million barrels, of which 80% had already been contracted by Repsol and Total.

Its project in Tuxpan materialized in 2016, when the company informed the public that it had preferential access, 24/7/365, to a 200-meter pier along the Pantepec River. “The dock has an existing permit for liquid hydrocarbons, making Monterra the only private company to have an existing permit to operate its facilities in Tuxpan,” he said at the time.

Likewise, such a protected location would represent an advantage for the clients of Monterraas at open water import points along the Gulf of Mexico, the potential for weather delays is significant and frequent.

“With exclusive access to more than 30 hectares in Tuxpan, a port facility with a liquid hydrocarbons permit; land near Tula; and a 270 kilometer pipeline with current rights of way; We are very well positioned to develop the first refined products pipeline, which has been made possible thanks to the energy reform of the Mexican Government,” said Arturo Vivar, CEO of Monterra.

On June 1, 2016, Monterra launched its open season to lease capacity to third parties, approved by the Energy regulatory commission (CRE), for the pipeline that is part of the refined products system from Tuxpan to Tula.

In parallel form, Monterra reached agreements with several important clients, both in Mexico and internationally, who together represented a sufficient demand to allow the company to continue with the expansion of the project.

On Monday, September 13, 2021, the CRE temporarily closed the operation of the terminal Monterra Energy, by not complying with the specific import standard for national vessels, although it had all the international documentation.

Monterra Energy was established in 2014 by Arturo Vivar and Michael Williams to achieve certain investment opportunities in projects and infrastructure assets in the Mexican energy sector. With offices in Houston and Mexico City, Monterra put together a team focused on the transportation, distribution, storage of hydrocarbons, electricity generation and oil services sectors, according to its own site.

Assets under management of the US fund KKR they totaled $471 billion at the end of 2021, in emerging economies from India and the United Arab Emirates to Chile.

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