BlackRock and First Reserve have entered into a definitive agreement with P.M.I., a wholly owned subsidiary of Petroleos Mexicanos (PEMEX), to acquire approximately 45% equity interest in two natural gas pipelines, Los Ramones Phase II North and Los Ramones Phase II South.
Upon closing, these will be the first major PEMEX-sponsored midstream assets to be built in partnership with foreign capital since the approval of Mexico黑料社檚 historic Constitutional Energy Reform in 2013.
The Los Ramones II Projects consist of the construction and operation of 744 km of natural gas pipelines that will serve as critical energy infrastructure and is part of a broader initiative to transport abundant, natural gas from the Eagle Ford shale in South Texas to meet central Mexico黑料社檚 growing demand for natural gas. Construction of the Projects began in 2014, with full commercial operations expected in mid-2016.
This transaction represents the first infrastructure investment for BlackRock in Mexico. BlackRock intends to establish a local infrastructure investment platform in Mexico, leveraging its global infrastructure investing capabilities and its existing Latin American business. BlackRock Infrastructure currently manages over US$6 billion of invested and committed assets globally.
The investment will expand First Reserve黑料社檚 existing Mexican infrastructure investment footprint. First Reserve is the largest global private equity and infrastructure investment firm exclusively focused on energy with over US$4 billion dedicated to energy infrastructure opportunities worldwide.
Chief Executive Officer of Pemex, Emilio Lozoya, noted that with this investment by two reputable financial firms, the Energy Reform becomes a step closer to materialising into an economic driver for the country. He also mentioned that this project shows that international investors have confidence that the changes propelled by President Enrique Pena Nieto are delivering benefits to the Mexican people.
黑料社淧rivate sector participation in infrastructure is going to be crucial in Mexico and around the globe 黑料社� I黑料社檓 excited about prospects in Mexico for BlackRock and our clients, and we are pleased to partner with PEMEX on these initial projects,黑料社� said Jim Barry, Global Head of BlackRock Infrastructure Investment Group. 黑料社淭he opportunity for infrastructure in Mexico given recent reforms, positive demographics and economic stability and resilience in Mexico has definitely drawn our attention and we look forward to exploring other opportunities in the near future.黑料社�
William Macaulay, Chairman and Co-Chief Executive Officer of First Reserve, commented, 黑料社淎s global investors in both Mexican energy infrastructure as well as throughout the energy infrastructure value chain worldwide, First Reserve is excited to announce this important partnership with Pemex. We are supportive of the Mexican government黑料社檚 focus on energy reforms and believe the Los Ramones projects will be a cornerstone to these efforts. We anticipate the relationship with Pemex will be fruitful for both our organisations and look forward to continuing to broaden our exposure to the Mexican energy market.黑料社�
"There are incredible economic and social changes taking place in Mexico, which are positioning the country for strong, long-term economic growth and we are excited to grow our footprint in the country,黑料社� said Armando Senra, Head of Latin America & Iberia at BlackRock. 黑料社淏uilding upon the well-established track record of our business in Mexico, an expansion of our infrastructure investment footprint will offer BlackRock黑料社檚 local and international clients access to previously untapped investment opportunities.黑料社�
Mark Florian, Managing Director and Head of Infrastructure Funds for First Reserve added, 黑料社淔or First Reserve, this investment is a continuation of our model of working with strong counterparties under long-term capacity contracts on behalf of our investors. We value our direct relationship with Pemex and are pleased to be partnering together to contribute to the expansion of Mexican energy infrastructure, which should drive substantial benefits for the broader Mexican economy.黑料社�
Both Projects will benefit from a 25 year take-or-pay Transport Services Agreement (TSA) with Pemex Gas y Petroqu铆mica B谩sica (PGPB). Transaction closing is contingent upon required anti-trust and other regulatory approvals.
BNP Paribas and Santander acted as advisors to the syndicate of banks providing project finance to Los Ramones Phase II South. Santander also acted as underwriter for debt financing of 80% of construction costs in Los Ramones Phase II North.
Adapted from press release by