Construction, Operation, Maintenance for Gas Infrastructure

Despite the global recognition of natural gas as a pivotal transitional fuel within the energy industry, its uptake in Mexico encounters hindrances stemming from regulatory uncertainties and infrastructure gaps.

Max Kolbe, Vice President of Growth and Development, Wood, observes the disparity between Mexico and the United States in natural gas usage, with over 80% of commercial usage in Mexico relying on LPG. According to the latest data from SENER, only 7% of the population nationwide had access to natural gas through pipeline infrastructure. As of September 2023, Mexico has a total of 19,060km of pipelines, of which 10,675km belong to CENAGAS and 8,385km to private entities.

Regarding industrial activities, infrastructure stands out as a major challenge. “Mexico's demand for natural gas is primarily driven by thermal generation, with the gas pipeline network aligning with CFE and privately awarded generation plants' plans from about 15 years ago. However, the current energy deficit, notably in the Yucatan Peninsula, underscores a pronounced lack of natural gas infrastructure. In contrast, the northern region sees growing industrial impetus driving increased energy demand”, says Gustavo Blejer, Manager for the Americas, Bonatti.

There are still about 12 states that do not have access to natural gas supply. Compressed natural gas and LNG solutions have allowed some companies to benefit from the service through virtual gas pipelines, but the country is far from democratizing access to natural gas. According to the Mexican Institute for Competitiveness (IMCO), without access to this fuel, the country's possibilities to generate, attract and retain investment and talent in high value-added sectors are limited, while investments attracted by nearshoring are at risk of moving away from these areas.

According to Blejer, regional development will be challenging without the required energy generation infrastructure. He underscores the postponed national necessity of projects like the Corridor of the Isthmus of Tehuantepec.

Beyond financial and technical considerations, the regulatory landscape emerges as a critical element, says Gustavo Nuñez, Managing Director at Rosen Group. Political uncertainty and administrative changes have led to project suspensions, with bureaucratic hurdles complicating the project generation process.

Blejer calls for a comprehensive guide and consensus support from various sectors in society, emphasizing the constitutional definition of these projects as being of public utility.

As regulations evolve to make projects more feasible, experts advocate for prioritizing preventive maintenance of the gas pipeline network. Rashid Luyen, Head of Section - Offshore and Mid/Downstream Mexico, DNV, identifies a significant challenge in allocating resources to preventive maintenance, particularly for the aging CENAGAS network, emphasizing the need for specific maintenance services tailored to natural gas’ specific needs.