VH
GLOBAL ENERGY INFRASTRUCTURE PLC ("ENRG" or the
"Company")
4
February 2025
Update on US Terminal Assets
following Trump Tariffs
On 1 February 2025, President Trump
issued three executive orders directing the United States to impose
new tariffs on imports from Canada, Mexico and China, to take
effect on 4 February 2025. The tariffs will be an additional 25%
levied on imports from Canada and Mexico and 10% on imports from
China. Victory Hill Capital Partners LLP, the Company's investment
manager ("Investment Manager"), is still reviewing the more
definitive details related to the tariffs.
Initial analysis by the Investment
Manager and the Company's operating partner, Motus Energy in Texas,
has led to the conclusion that the imposition of the tariff will
not have an impact on the northbound flow of residual slurry from
Mexico into the Company's fuels terminals in the Port of
Brownsville Foreign Trade Zone in Texas, US.
There is the awareness that the
current administration has deep and extensive connections with the
energy industry in the U.S., the constituents of which are awaiting
more positive outcomes for refinery businesses they hold in the
U.S., which would otherwise be negatively affected by the tariff.
From the information available today, it is considered that the
potential negative financial impact of the tariff on the customer
revenues and business of the Company's terminal assets is
low.
Customer contracts have been
designed to manage downside risk and include minimum volume
commitments regardless of throughput through the
terminals.
Slurry is shipped from the terminals
into refinery coking facilities in Texas and Louisiana at a
significant discount to crude pricing, and therefore the imposition
of tariffs on a commodity with such low value has little effect on
the flow, as long as there is impetus for the Mexican refineries to
ship the product across the border to Brownsville - a strategic hub
for cross-border product movements. The nearest Mexican refinery to
the assets, the Cadereyta refinery in Mexico, continues to produce
and supply refined products into Mexico at pace, and as a result of
the process, produces a significant overhang of residual fuel
slurry which needs transporting to the US, along the only
geographically viable route, which involves transiting the fuels in
the terminals in Brownsville.
Should the Mexican national energy
company PEMEX, via its trading arm PMI, choose an alternative end
coking facility outside of the US for its slurry, it would still
utilise the terminal assets prior to shipping the product overseas
from the Port of Brownsville.
While announced with significant
coverage, the full scope of the tariffs remains unclear, as key
details have yet to be published. These annexes are essential to
determining the breadth of products potentially affected by the
tariff in the Mexico-US border trade in crude oil and oil products.
Lack of clarity has been further compounded by the one-month
moratorium on the tariffs recently announced on 3rd February
2025.
The Investment Manager continues to
monitor developments on this issue closely with Motus
Energy.
The Company's Q4 factsheet will be
published on 21 February 2025.
www.globalenergyinfrastructure.co.uk
The Company's LEI is
213800RFHAOF372UU580.
For further information:
Edelman Smithfield (PR
Adviser)
Ged
Brumby
+ 44 (0)7540 412 301
Eleanor
Pomeroy
+ 44 (0)7581 010 801
Victory Hill Capital Partners LLP
(Investment Manager)
Navin
Chauhan
info@victory-hill.com
Deutsche Numis (Corporate
Broker)
David
Benda
+44 (0)20 7260 1000
Matt Goss
Ocorian Administration (UK) Limited
(Company Secretary)
oaukcosecteam@ocorian.com
About Victory Hill Capital Partners LLP
Victory Hill Capital Partners LLP
("Victory Hill") is authorised and regulated by the Financial
Conduct Authority (FRN
961570).
Victory Hill is based in London and
was founded in May 2020 by an experienced team of energy financiers
that spun-out of a large established global project finance banking
group. The team has participated in more than $200bn in transaction
values across 91 conventional and renewable energy-related
transactions in over 30 jurisdictions worldwide. Victory Hill is
the investment manager of the Company.
The Victory Hill team deploys its
experience across different financial disciplines in order to
assess investments holistically from multiple points of view. The
firm pursues operational stability and well-designed corporate
governance to generate sustainable positive returns for investors.
It focuses on supporting and accelerating the energy transition and
the attainment of the UN sustainable development goals.
Victory Hill is a signatory of the
United Nations Principles for Responsible Investment (UN PRI), the
United Nations Global Compact (UN GC), Net Zero Asset Managers
Initiative (NZAMI), a member of the Global Impact Investing Network
(GIIN) and is a formal supporter of the Financial Stability Board's
Task Force on Climate-related Disclosures (TCFD).
