Overview: The Trans-Guatemala Inter-Oceanic Pipeline System (TGP) is an ambitious 320-kilometer infrastructure project designed to revolutionize the transportation of crude oil and refined petroleum products between the Atlantic and Pacific coasts of Guatemala. This state-of-the-art pipeline system features three bi-directional pipes, enabling seamless movement of oil in both directions, thereby enhancing flexibility and efficiency in energy logistics.
Project Investment: With a substantial senior loan commitment of $7.52 billion, the TGP project is poised to be developed over several meticulously planned and approved phases by Chimera Capital. This significant financial backing underscores the project's viability and the confidence investors have in its strategic importance and long-term profitability.
Strategic Advantages of the TGP System
Alternate Maritime Route Creation:
Enhanced Connectivity: The TGP system establishes a vital alternate maritime route for supertanker shipments, connecting the US Gulf, Caribbean, and Atlantic regions directly to Asian markets. This direct linkage minimizes dependency on traditional routes, fostering greater energy security and market resilience.
Cost and Time Efficiency:
Reduced Transit Days: By leveraging the TGP pipeline, the system offers a remarkable ~50% reduction in transit days compared to the conventional maritime route that traverses Africa, the Indian Ocean, and the Malacca Strait. This drastic cut in transportation time translates to significant cost savings for shipping companies and end-users.
Mitigation of Maritime Risks:
Avoidance of Delays: The alternate route circumvents common issues associated with the existing Eastbound route, such as adverse maritime conditions, piracy in high seas, and maritime congestion. This ensures more reliable and predictable shipping schedules, enhancing overall operational efficiency.
Operational Workflow:
Seamless Transfer Process: Tankers originating from the US Gulf, Caribbean, or Atlantic regions will unload their crude oil at strategically placed monobuoys off the Atlantic coast. The oil will then flow through the TGP pipeline system to monobuoys located off the Pacific coast. From there, it will be reloaded onto supertankers equipped for trans-Pacific Ocean transport, ensuring a smooth and efficient transfer process.
Competitive Edge and Market Impact
Leveling the Playing Field: One of the TGP system’s standout advantages is its ability to significantly reduce the number of days required for transporting crude oil from the Atlantic to Asia. This efficiency levels the competitive playing field between suppliers from the Atlantic/US Gulf/Caribbean regions and those from the Middle East, fostering a more balanced and competitive global oil market.
Strategic Imperative: The TGP project addresses a critical strategic need by providing an alternative Westbound shipping route. This route not only enhances competitive dynamics with Middle Eastern suppliers but also strengthens the energy supply chain's resilience against geopolitical and environmental disruptions.
TGP's CEO George Mesa Lorenzo and Guatamala President Giametti.
Economic and Environmental Benefits
Economic Growth: The TGP pipeline is set to stimulate economic growth in Guatemala by creating jobs, attracting foreign investment, and fostering the development of related industries. Additionally, the increased efficiency in oil transportation can lead to lower fuel costs and enhanced economic stability in the region.
Environmental Considerations: By reducing the distance and time required for oil transportation, the TGP system can contribute to lower carbon emissions associated with shipping. Additionally, the reduction in maritime congestion and piracy-related risks promotes safer and more sustainable maritime operations.
Chimera CEO Ambassador Hans H. Hertell and Guatemala President Giametti.
The Trans-Guatemala Inter-Oceanic Pipeline System (TGP) represents a transformative leap in global oil transportation infrastructure. By offering a faster, more secure, and cost-effective alternative to traditional maritime routes, the TGP system not only enhances Guatemala’s strategic position in the global energy market but also contributes to a more balanced and resilient international oil supply chain. With robust financial backing from Chimera Capital and a clear vision for sustainable growth, the TGP project is set to become a cornerstone of modern energy logistics.
TGP's CEO George Mesa Lorenzo, Guatemala President Giametti, and U.S. Ambassador to Guatemala.
Future Prospects and Expansion
Chimera Capital’s phased investment approach ensures that the TGP project can scale effectively to meet growing demand and adapt to evolving market conditions. Future expansions may include additional pipelines, enhanced storage facilities, and advanced monitoring systems to further optimize the system's performance and reliability.
TGP's CEO George Mesa Lorenzo at the public signing of the agreement.
Partners:
U.S. Government’s International Development Finance Corporation, formerly OPIC (US Overseas Private Investment Corporation) has provided a letter of interest to participate in a minority portion of the total project financing and provide political risk insurance, subject to final diligence and the requisite government approvals.
Jacobs Engineering – Engineers
Founded in 1947, Jacobs Engineering Group is a Fortune 500 international technical professional services firm. Jacobs specializes in pipeline engineering, primarily providing professional services and resources to the oil, gas and petrochemical industries. The firm’s services cover the full life cycle of project planning and delivery, from conceptual studies and design to full turnkey engineering, procurement and construction solutions and operational support.
ACS Group - EPC Contractor
Founded in 1997 and headquartered in Madrid, the ACS Group is today a worldwide reference in the civil and industrial construction and infrastructure development industries. Since 2013 ACS leads the ENR ranking of International Contractors. ACS owns majority stakes in globally recognized construction enterprises Dragados (Spain) and Hochtief (Germany) among others. In fiscal year 2016 the ACS Group generated gross revenues exceeding 34 billion Euros. ACS is a recognized and respected name in Guatemala where it has maintained a presence for 17 years. COBRA, an ACS subsidiary, built the “Renace II” hydroelectric project in Guatemala, owned by Recursos Naturales y Celulosas, S.A. (RENACE, S.A.).
Chimera Capital Partners LLC– Financial Advisor and Senior Lender
Chimera Capital is an independent private lender providing strategic, project finance and corporate advisory services for oil & gas, power, industrial and infrastructure clients globally. Chimera is globally respected for its expertise in project finance and is a top private lender for energy and infrastructure. The firm’s principals bring extensive experience in corporate finance and capital raising to clients’ energy and infrastructure businesses worldwide.
Associated Pipeline Contractors (APC) – Pipeline Construction & Consulting
Founded in 1946, APC offers the experience of working on major pipelines in over 43 states and 27 countries, having completed over 25,000 miles of pipeline construction on land and water, in diameters up to 48-inches, and with capabilities in the fields of hydrostatic testing, rehabilitation work and pipe double joint welding. In addition to the United States, APC has successfully completed projects in Saudi Arabia, Libya, Turkey, Venezuela, Mexico, Germany, Holland, France, Argentina, Canada, Colombia, Ivory Coast, Bangladesh, Sudan and Great Britain, often under severe climatic and topographical conditions.
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