REG - VH Global Energy Inf - Update on US Asset following Trump Tariffs

VH Global Energy InfrastructureAnnouncement

04/02/2025 07:15

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RNS Number : 7445V  VH Global Energy Infrastructure PLC  04 February 2025

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 (mailto: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).

 

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