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News Article

CENAGAS Calls for Natural Gas Supply Bids

By Cas Biekmann | Thu, 07/23/2020 - 09:40

CENAGAS, Mexico’s pipeline operator, has issued a second bidding for natural gas. The goal is to ensure that Mexico’s SISTRANAGAS system maintains its balance, reported Natural Gas Intelligence. CENAGAS is issuing the call to increase the number of natural gas supply contracts and aims to only make use of the contracts when the conditions call for it. By injecting more natural gas into the system, CENAGAS is able to save money and effort by preventing further balancing measures.

The bidding process opens today. Interested parties will receive a response in 10 days after submitting a bid, which is to be done online. Once contracts are signed, CENAGAS can call upon the supplier until the end of the year. During the last bidding process, which took place in December 2019, eight of the 11 bids entered met CENAGAS’ demands. This showed the potential for private companies to participate as long as they have of all the relevant permits.

CENAGAS’ plans follow a public consultation process, which is boosting a variety of business opportunities for players in the natural gas sector, both in the US and in Mexico. Although the results of the consultation are expected to be published next month, CENAGAS is already using the information to define the demand for natural gas in the country and identify where further projects need developing.

Eduardo Prud’Homme, who oversaw CENAGAS’ creation as an experienced government official in the energy, oil and gas sectors, wrote an opinion piece for NGI regarding the operator’s positive role in Mexico’s energy sector. “[CENAGAS] lacks a big budget and operates with the resources it obtains from the collection of service fees for the transportation of gas in the national system, so it stays out of the way of the public discourse on austerity,” Prud’Homme wrote. CENAGAS still faces a myriad of challenges to boost faith in business for natural gas in what Prud’Homme calls an economic environment that has turned “sour.” It aims to do so by focusing on industrial gas users, as well as by creating a secondary, electronic market for gas, among many other plans.

Natural gas infrastructure is facing a significant overhaul, with renewed focus on infrastructure both in Mexico and the US, from where Mexico’s natural gas supply is imported. Some of the major projects include one in Reynosa, which hopes to address import congestions. It includes an expansion of pipelines on both sides of the border at Las Adelitas hub. Other companies, such as Mirage Energy are working to enhance the Concho-Progreso pipeline stretching past the US-Mexico border, allowing Permian Basin gas producers further access Mexican markets.

The data used in this article was sourced from:  
Natural Gas Intelligence, Energía a Debate, gob.mx
Cas Biekmann Cas Biekmann Journalist and Industry Analyst