CAIO ZAPATA

Mexico 2021 | ENERGY | INTERVIEW

Looking to continue to grow its customer base and pushing further into Mexico, Énestas is providing customers with access to competitive resources like natural gas and electricity.

Caio Zapata
BIOGRAPHY

Caio Zapata is an entrepreneur and executive director with more than 15 years of experience working on the operational and financial restructuring of different companies in the manufacturing, generation sectors electric and natural gas. Taking advantage of the energy reform in Mexico, he founded Énestas S.A. de C.V., developing the largest natural gas distribution and commercialization network in Mexico. Additionally, he has successfully restructured more than eight companies in Mexico, Brazil, and Central America.

Can you tell us about the main changes Énestas has made to adapt to the context of the market?

Énestas started serving LNG to companies that are outside the pipeline grid. No matter how big or small the companies, we always try to serve those customers and develop those areas that do not have access to natural gas. Énestas continued to grow its business and started a trading office to serve customers who are connected to the pipeline. Furthermore, we have expanded our portfolio of solutions and can now build and operate fuel and raw material terminals.

Énestas is also advising industrial parks in different parts of Mexico on creating better gas infrastructure. Can you elaborate on this segment of your business?

It is one of these chicken-and-egg situations. An industrial park opens in a new place and starts looking for customers, but it is limited in the businesses it can attract to the park if it does not have access to natural gas. We work with them to build the internal natural gas pipeline infrastructure for the park and supply them LNG. That way, the industrial parks can start acquiring customers that need that resource from day one. Once they achieve a critical mass or a certain size, they can connect directly to the pipeline and get that cheaper option.

Énestas also built the first terminal in Mexico that serves both liquid ethane and LNG. What opportunities did you see in the market that led you to create this project?

It is an interesting project for us. We call them temporary terminals, which are small-scale terminals that are complementary to whatever volumes you might be receiving through the pipeline or where you cannot justify a longer term 20-year commitment to having a terminal. We build small-scale temporary terminals that are intended for a four- or five-year term. We completed this terminal in 2020, and it has already received more than 18 different vessels. It is the first terminal of its kind, and it has been a safe operation. We operate 24/7, and it has helped our customer continue to maintain its production efficiency by complementing their raw material input through this terminal. The terminal is on the Gulf Coast in Coatzacoalcos, Veracruz. Right now, it is just being used for liquid ethane, but it is ready work in LNG.

Énestas has an ambitious goal of developing the biggest network of natural gas in Mexico and becoming one of the biggest providers in North America. What investments and steps are you taking in 2021 to achieve this?

We want to emphasize each of our business models. Because Énestas can use pipelines, road, and maritime transportation, we a greater reach compared to other gas distribution companies. However, there is investment needed to be done on small-scale LNG, pipeline natural gas, and terminals. So, we are broadening our scope and offering solutions that people just did not know existed. We want to supply customers with LNG on a small scale, build short-term terminals, and then move that equipment and installation to other places where we can reach them again with the same business model. We want to continue to grow in each of those segments.

What has been Énestas' experience as a Mexican company distributing natural gas in the US, and what are the challenges of supplying cities like Houston?

It is always challenging because as a newcomer you have to understand where the market stands, who the key players are, and what they are offering. In the US, there are some big companies offering a wide range of services. Therefore, our focus is to find niche areas that have not been served yet. We are growing cautiously because the US is so big that we do not want to grow too fast and end up unable to serve our customers in the right way.