was doing some work on this company and here's an article i found.
it is an article posted on the "troubled company reporter". it is dated sometime in april 2003. it doesnm't make reference to POCC. but no need, everyone can see what is cooking. (The article is posted at teh end of my theory)
0) POCC is getting extremely cocky about biting the hand that feeds it, namely Pemex..after all they do 40% of northern imports so why not get more. they want to build a terminal in saltillo to sell directly to distributors, they want to show them how it's done. they want to use the Tergas license to do beat them i their home turf. Never a good combination. what were they thinking? Asset light- Enron style???? how much of the assets do they really own? for instance the cowboy pipeline is it still 30% or already more? they like options a lot so it would be interesting to see how much is really theirs.
1) Pemex cuts miraculously the remainder of its 3-year 240 MM gall. contract to a 2 year 200 MM contract sometime in 2002. wouldn't we all have done the same?
Somewhere I see a press realease were managment dabbles that the original contract signed was just a term sheet and this now is the executed version that brings all the clarity. yeah right!
2) Pemex wants to decrease dependence on LPG by opening up more Northern/Northeaster gas fields to the majors and minors.
3) Not much success initially on bidding of contracts in december. no show for Pemex..
4) pemex announces to build two cryogenics plants in Reynosa in april 03 (just 50-60 miles from Brownsvill).. SEE Article ...the express reason is to decrease LPG imports from the North. there's even a source.. call him. they invest $130 MM in such capacity. One unit will be operational in Dec 2003, the other in February 2004..
5) what I can't tell yet is how much LPG production capacity $130 million worth of cryogenics investment gets you. must be a bundle.
6) Deal with Valero is signed.. and a 5-year deal (not 1-year, 2 or 3 year, or just 5 months left on the contract). they like big firms. apparently and readily invite. a bit competition to the north can't hurt.
7) Repsol jumps in the fray by bidding on the Monterey-Reynosa tract.. a big enough tract to make POCC's importing life miserable, if they find anything and ship some of the product to Reynosa Pemex Cryogenics Plants for processing into LPG...
8) petrobras and teching also bid, but on minor patches. others don't bet..
9) conclusion: LPG imports are still needed but maybe over time not as much as before.. I don't understand the hurry to have the cryogenics plants um and runnin by DEc and Feb.. could they have something to do with the near term expiration of the current 2 year Pemex contract that expires April 2004..
10) i'd be surprised if they come off with a 200 MM contract this time. depends what all this supply sourcing diversification action really gets them.
PEMEX: Investing in Two Cryogenics Plants, Cuts Down LPG Imports ---------------------------------------------------------------- Mexico's state oil company, Pemex, will invest in two cryogenics plants at Reynoso, reports Business News Americas, citing Pemex Gas y Petroquimica Basica deputy director Salvador Garcia-Luna. The Company has earmarked US$130 million for the projects this year.
The new plants will allow the Company to cut down on liquefied petroleum gas (LPG) imports. Presently, Pemex only produces 205,000 barrels of the country's daily LPG demand of 335,000 barrels. Pemex imports LPG to fill in the gap.
Mr. Garcia-Luna said Mexican-US engineering and construction joint venture ICA-Fluor Daniel and German engineering firm Linde Process Plants have begun working on the plants. Based on the working schedules, the first cryogenic plant should be operational by December 2003 and the second by February 2004.