Infrastructure Package Includes Nine Energy ProjectsBy Cas Biekmann | Thu, 12/03/2020 - 13:56
Investments that pertain to the second infrastructure package and Mexico’s potential production of its own natural gas are among the top stories for the week. Read this and more, including Biden’s climate plans, a US$6 billion-dollar acquisition and cut-off gas supplies, all in your weekly roundup!
Second Infrastructure Package Includes Nine Energy Projects
The Mexican government, together with the Business Coordinating Council (CCE), have announced a second package of infrastructure projects. The package consists of 29 projects in total, nine of which are related to energy and make up an investment of MX$116.7 billion (US$5.79 billion). Each project will receive at least 50 percent of private investment. Key projects include a gas terminal by IEnova and several combined-cycle power plants to be operated by CFE.
Senator Proposes Altered Tax Regime for Natural Gas Extraction
Armando Guadiana, President of the Senate’s Energy Commission, proposed an altered tax regime under the Hydrocarbon Revenue Law to make natural gas production more profitable. The Shared Utility Right (DUC) does not distinguish between gas associated with oil fields and gas that is not found within crude oil fields. Under this circumstance and considering the current market prices, the exploitation of natural gas fields is not considered worth the trouble. Since Mexico increasingly bets on imported natural gas for power production, the country could benefit from amplifying its own production.
CFE Seeks to Import Electricity From the US
CFE International hopes to import electricity from the US during a five-year term. However, this depends on an environmental evaluation and the assurance that this new supply will not affect US demand, El Sol de Mexico reported.
The request states that energy purchased will be used to supply electricity at the border. In addition, CFE assured that it will not affect the demand for electricity in the US, since the energy that will be used in Mexico is expected to come from the surplus of entities that sell electricity.
How Can Biden’s Climate Plan Benefit Mexico and the US?
US President-elect Joe Biden is already changing the political spectrum. Biden plans to establish a full throttle energy transition to meet stringent climate goals. What could this move toward renewables mean for Mexico and the US? MBN expert contributors weigh in on this debated topic.
CENAGAS Cuts Braskem Idesa’s Supply
Energía a Debate reported that on Nov. 30, CENAGAS advised Braskem Idesa that it will neither renew nor extend the service contract concerning the transportation of natural gas to Braskem’s Ethylene XXI complex in Veracruz. Yesterday, the gas valve of the complex was closed without previous notice. Braskem Idesa’s management reacted dismayed. Earlier this year President López Obrador had named the contract as “leonine”.
Europe Goes for Offshore Wind
Offshore wind is still a mere possibility in the Mexican context. Nevertheless, both Europe and the UK are going for it with ambitious goals: 100GW installed capacity by 2030; 40GW in the UK and 60GW in the EU. The latter aims for 300GW by 2050, meaning that offshore wind will have strong winds pushing it forward.
Sempra to Acquire Remaining 33.57 Percent Stake in Mexico’s IEnova
Sempra Energy announced it would buy the remaining stake of IEnova, valued at US$6.13 billion. Sempra already owns 66.43 percent of IEnova and gears up to acquire the company in full to further invest in clean energy and storage, reported Reuters.