Expanding Energy Access and LNG Infrastructure in Mexico

Q: How has Enestas evolved since our last conversation in 2021, and what are the company’s main priorities for expansion in Mexico and beyond?

A: Enestas is a company in constant development and evolution. We started in the LPG segment, and then began adding more business lines. We incorporated natural gas commercialization, as well as the construction and operation of raw material terminals beyond LNG, specializing in cryogenics. We mainly handle ethane, and from there, we have strengthened our business lines.

One of our main goals, which has remained constant over time, is to reach every point in the country. That is where we have focused most of our efforts. We have always had plans to reach South America, but first, we must resolve the issue of Mexico’s southeastern peninsula. That has been our strongest focus: finding a competitive, ecological, and efficient way to deliver natural gas to the southeast.

The region holds a very different level of importance today than it did in 2021. It has gained relevance with projects like the Mayan Train and the growing industries investing there. Now, there is an additional component we did not have before: an interesting projection of demand. It is very difficult to transport hydrocarbons if there is no market to sell to, and building the necessary infrastructure first requires very aggressive investments to reach a breakeven point. That has mainly defined our focus, gradually moving our operations further south.

Fortunately, we already have several projects under development that will allow us to reach that region in a much more competitive, safer, and faster way than we could in 2021. 

Q: Can you tell us more about Enestas’s infrastructure and terminal projects in Coatzacoalcos?

A: We have a dual terminal in Coatzacoalcos. By dual, I mean that it can currently be used for ethane but can also be adapted for LNG. This gives us a strategic outlet from Coatzacoalcos, in Veracruz, which is already very close to other key points.

When the LNG industry first began in Mexico, we often had to transport it all the way from the US border, and reaching the southeast was extremely expensive. Now, we have the possibility to use our LNG terminal, which is one of our most important projects. We are putting a lot of attention into developing that region, and we also have plans for our own supply development, namely, regasification plants that will bring us even closer to Mexico’s southeast.

Q: How has demand from your clients evolved, and how do you adapt your business model to their needs?

A: The fuel demand from many of our existing and new clients has grown considerably. Although previous years brought economic challenges that affected production forecasts, we supply a wide range of industries, from greenhouses to manufacturing plants. Any fluctuation in the global or national economy directly affects their production, and production is closely tied to natural gas consumption.

Fortunately, demand has been increasing. Our LNG model offers a major advantage, as we can grow alongside our clients. That is exactly what we have been doing. We have expanded modularly with them, and our trading-based commercialization model has been very successful because we offer solutions different from those on the market, which lead to better rates and real savings.

Since the beginning, Enestas has prioritized personalized service. We focus on ensuring our clients do not overpay, that they save, and that they stay with us long-term while continuously seeing those savings and growing with us. We do not just deliver gas; we build relationships. We study how their industries operate, performing detailed analyses of their equipment consumption forecasts to understand their needs and help them in areas they may not have the time to focus on. We take care of those details so that they can save.

Q: How does Enestas manage natural gas supply disruptions and ensure reliability for clients, especially given Mexico’s gas import dependency?

A: No one is exempt from disruptions that can interrupt natural gas flows. We depend on the United States, and we will continue to depend on it for quite some time because infrastructure investment is still needed. Energy independence in Mexico must eventually come, but it will take time and effort. Our trading model is complex since the gas is imported from the United States, which makes it somewhat vulnerable to these types of events. However, in the LNG segment we have a major advantage, as we store gas onsite with our clients.

During the 2021 winter storm in Texas, we did not leave a single client without gas. Not only that, we also shielded them from the US$450/MMBtu tariff spikes. Because we understand our clients’ operations, we had gas stored at normal rates, allowing them to continue producing during those three days without disruption. We also gave them flexibility to reduce production if needed. This constant communication and deep understanding of our clients’ businesses make us strong in facing these kinds of contingencies.

Q: What role do you see for natural gas and LNG in Mexico’s energy transition and global energy context?

A: Natural gas is indeed a transition fuel, but it is a very prolonged transition. The current geopolitical situation is accelerating the shift toward LNG. We are seeing issues in Asia and Europe where ambitious projects are underway simply to ensure LNG supply because there are no alternatives. Renewables like wind and solar cannot yet meet the massive energy demand our planet requires. Fortunately, while natural gas is still a hydrocarbon, it is far less aggressive and much cleaner for the environment compared to other fossil fuels.

LNG, in particular, plays a critical role because its characteristics allow it to be transported across oceans and moved by road, as we do here in Mexico. Enestas’ role is to continue growing to meet these diverse needs, from small industries to large-scale projects that may even involve crossing borders. These are the kinds of strong projects we are investing in, finding increasingly better, more economical, and more ecological solutions for all our clients. For us, there are no small or large clients. We have the capacity to serve any client, and that is one of our greatest strengths.

Q: What are the main challenges Enestas faces in Mexico, particularly in terms of infrastructure and permits?

A: There are many challenges in Mexico: permitting, infrastructure, and road conditions. Specifically, for virtual pipeline transportation, we lack infrastructure, better highways, and safer roads. There has been progress, yes, but we need more. We need to be able to move from point A to point B quickly, safely, and efficiently, with proper road infrastructure. This remains a challenge in places like Baja California and Mexico’s southeast, where infrastructure is still limited.

The permitting issue is also very relevant. It would benefit the entire country if we could accelerate these processes, not just to obtain faster approvals, but to have clear, timely, and efficient relationships that allow the industry to grow. It is difficult for a company to wait months or even years to develop a project. These obstacles can delay or even relocate investments. There has been progress, but we can do more. We should work more closely with authorities to speed up approvals, permits, and infrastructure development. Many companies, including us, are willing to invest in developing these channels to deliver our raw materials to end clients.

Q: How do you view Mexico’s role in the regional and global gas market, and what responsibilities come with that position?

A: I believe Mexico has a privileged geographic position that allows it to develop these kinds of projects. They are good for the country, but we also need them to benefit Mexico itself.

Large-scale LNG export projects should also have the capacity and willingness to leave natural gas in the country. The more access we have to natural gas, whether from us or from other plants, the more competitive the market becomes.

I see Mexico growing in the natural gas sector overall, but we need to commit to developing the country itself. Our slogan is “We develop Mexico,” because before expanding abroad, we must leave our mark here. We must ensure energy security and stability at home first. There are promising projects that can make it possible, and we are doing our part to help deliver natural gas to every state. The difference between a state with access to affordable natural gas and one without it is enormous. We cannot maintain such disparities between the north and south. We have the resources and geographic advantage to develop this country exponentially.

Q: How has Enestas adapted to changing industrial and energy needs across Mexico?

A:The evolution of our company has been very organic. We have been able to respond to needs we identified ourselves, as well as those that emerged naturally from the market. The need for natural gas and the migration toward cleaner fuels has grown steadily. We now see aggressive state-level policies, with Tamaulipas and Queretaro becoming key hotspots growing exponentially. These developments create specific needs that must be addressed from multiple angles, and that is where we position ourselves.

We go beyond natural gas. We also work with other raw materials, developing logistical knowledge and customer-focused solutions that extend beyond the energy sector. Companies need much more than just natural gas to carry out their production processes. That expansion and diversification are what we have been building for some time, transforming Enestas from an energy company into one that provides infrastructure, construction, and logistical solutions.

Énestas is involved in the creation of natural gas access and solutions in Mexico. With activities in the generation, distribution and retail of natural gas for vehicles, Énestas is working to become the preferred company for natural gas-related services.