Pace Global

NGL Storage Valuation

Clien Need
Client Need:
An independent developer and operator of liquid storage facilities was seeking to determine the value of providing regulated services to a monopoly customer in Mexico.


Our Role
Our Role:
Pace Global undertook a comparative evaluation of regulated and market-based rates across three midstream asset classes in Mexico, including evaluating their respective regulatory rate treatment in comparison to natural gas pipelines and storage facilities. The work included an assessment of cost-of-capital differences among the asset classes based on the expected level of market competition, key market risks, and other contributing factors. As part of this analysis, Pace Global compared the nature of commercial services offered by the alternative asset classes by preparing peer group studies and benchmarking various pipeline and gas storage facilities against the observed pricing allowed for liquids storage.


Results
Results:
Pace Global’s analysis was used to support the case for a greater cost and risk premium associated with a less competitive liquids storage facility based on comparisons made to U.S. market and project performance and observed return levels.
Pace Global