Mexico at a Natural Gas Crossroads Heading Into 2026

As Mexico advances toward 2026, the country finds itself standing at one of the most consequential crossroads in its modern economic and energy history. Rarely do so many transformative forces converge at the same time: institutional restructuring, geopolitical tension, global supply chain realignment, technological disruption, the accelerating pace of the energy transition and an unprecedented surge in industrial demand.

Among all these forces, one element perhaps more than any other will determine the degree to which Mexico can seize the opportunities before it or remain constrained by structural vulnerabilities: natural gas.

Natural gas is the foundation on which Mexico’s industrial base is built. It is the engine of electricity generation, the indispensable feedstock for key manufacturing sectors, the hidden pillar of nearshoring competitiveness, and the practical bridge in Mexico’s path toward a cleaner energy future. Yet it is also, paradoxically, the country’s greatest strategic weakness. Mexico imports more than 70% of its natural gas from the United States, one of the highest levels of energy import dependency anywhere in the world for an economy of Mexico’s size.

This article is not simply a technical analysis of natural gas markets. It is an invitation to reflect on Mexico’s strategic direction and its moment of decision because the next two years will determine much more than supply flows or price signals, they will define the contours of Mexico’s role within North America, the resilience of its industrial development, and the credibility of its energy governance. This is a decisive moment. And it demands clarity, urgency and leadership.

A New Era

Mexico is entering a new era of institutional restructuring. The creation of the National Energy Commission, the enactment of the new Hydrocarbons Sector Law, and the repositioning of various regulatory bodies mark an ambitious attempt to recalibrate the country’s energy architecture. The intent is to consolidate planning, standardize regulatory processes, eliminate duplicative mandates, and build a more coherent governance structure capable of responding to 21st-century energy demands.

These reforms signal an acknowledgment of a truth long recognized by industry observers: Mexico’s energy institutions had become burdened by overlapping responsibilities, inconsistent regulatory interpretation, delays in permitting, and insufficient alignment with national development priorities. The new institutional framework aims to rectify these limitations by fostering long-term planning capacity rather than reactive decision-making, regulatory coherence across agencies, certainty for private and public investment, stronger energy security mechanism, and an alignment between industrial policy and energy policy. In theory, this redesign could create the conditions for Mexico to integrate natural gas infrastructure, electricity generation, industrial expansion, and environmental objectives into a unified strategic plan, something the country has lacked for decades. But as with all structural reforms, the true impact depends on execution.

If implemented effectively, this institutional redesign could anchor the next 20 years of Mexico’s energy strategy and support the consolidation of Mexico as a North American energy leader. If implemented poorly, if captured by political fragmentation, administrative delays, or inconsistent interpretation, these reforms could entrench uncertainty, slow infrastructure deployment, and exacerbate Mexico’s existing vulnerabilities. The difference between success and failure will depend on leadership, coordination, and the capacity of institutions to rise above short-term pressures to deliver long-term national outcomes.

For instance, Mexico’s reliance on the United States for natural gas imports is one of the most defining characteristics of its energy landscape. This dependency is both a powerful competitive advantage and a source of acute vulnerability. US shale production is among the most prolific and cost-efficient in the world. The abundant supply exported through pipeline networks into Mexico has enabled low industrial energy costs, competitive electricity generation prices, expansion of manufacturing capacity, replacement of heavy fuels with cleaner natural gas, integration of Mexico into North America’s industrial and energy value chains, and a solid foundation for the nearshoring boom. This dynamic allowed Mexico to maintain one of the most competitive industrial energy cost structures in the world, attracting multinational manufacturers and enabling sectors such as automotive, steel, aerospace and electronics to flourish.

Yet, dependency is a fragile position when the supply originates beyond national borders. The lessons of February 2021’s Winter Storm remain a stark reminder of what can happen when weather, logistics, and political priorities collide. With natural gas imports concentrated primarily through the Waha hub in Texas, Mexico faces several ongoing risks:

• Climate-driven supply disruptions Extreme cold snaps can interrupt or reduce cross-border flows.
• Pipeline congestion: Growing US LNG exports increase competition for pipeline capacity.
• Regulatory exposure: Changes in US environmental or export regulations directly affect Mexico.
• Geopolitical volatility: Cross-border disputes or shifts in trade frameworks can influence flows.
• Lack of diversification: Reliance on a single basin and single country is inherently risky.

Mexico has made notable progress in expanding natural gas infrastructure, particularly in the northern region. Yet, the country’s pipeline network remains uneven, storage capacity remains minimal, and connectivity gaps threaten to undermine industrial and regional development. The past decade has seen the development of cross-border and domestic pipelines that have substantially increased Mexico’s import capacity and regional interconnectivity. Projects being developed and under development have improved the country’s ability to receive volume and serve regional demand. However, the central and southern regions still lack adequate redundancy and infrastructure. Nearshoring-heavy states such as Queretaro, Guanajuato, and Puebla need expanded capacity to accommodate expected industrial growth.

Infrastructure Potential

So far, Mexico’s lack of natural gas storage is arguably the most dangerous gap in its energy security. Most countries maintain storage equivalent to 40–90 days of demand. Mexico has less than three days. It is no exaggeration to say that Mexico’s future energy security depends on building meaningful storage capacity. As well, many industrial corridors lack the last-mile pipeline connections needed to deliver gas from trunk pipelines to factories. Without last-mile solutions, even regions located near major pipelines cannot fully benefit from existing infrastructure. This gap becomes existential when multinational manufacturers evaluate whether a region can support multi-decade operations.

On the other hand, liquefied natural gas (LNG) is reshaping global gas markets, and Mexico is uniquely positioned to benefit from this transformation. Mexico’s west coast is emerging as one of the most geopolitically valuable corridors in the global LNG landscape. Pacific coast terminals have the potential to provide US-origin gas a faster route to Asian markets, bypass the Panama Canal, establish Mexico as a transpacific energy bridge, attract significant foreign investment, and develop world-class industrial ports and logistics centers. No other country holds this combination of infrastructure potential and geographic advantage.

It is important to start looking at small- and midscale LNG solutions that are becoming essential for remote mining operations, Industrial hubs without pipeline access, food processing, automotive and cement plants, power generation in isolated grids, and heavy-transport-sector fuel-switching. This model democratizes energy access across Mexico, reducing regional inequality and enabling industrial development in previously excluded regions. Incorporating LNG into Mexico’s energy system provides redundancy during pipeline outages, extreme weather, maintenance and peak demand periods.

Monumental Opportunity

The relocation of global supply chains represents the most monumental industrial opportunity for Mexico since the signing of NAFTA. Mexico is now becoming a manufacturing hub for North America, a logistics and supply chain center, a key location for advanced manufacturing, and a nearshore partner for high-value industries. States such as Nuevo Leon, Coahuila, Chihuahua, Queretaro, Puebla, Aguascalientes, and Guanajuato are experiencing levels of industrial development that strain existing energy infrastructure. Without expanded natural gas capacity, the nearshoring wave could slow, bypass or even relocate to US regions that will offer guaranteed energy availability, redundancy and storage, more predictable regulatory environments, and fully integrated energy infrastructure. That is why Mexico must align its energy planning with its industrial ambitions.

The global energy transition is accelerating, but it cannot progress without natural gas as a stabilizing force. Natural gas will remain essential through 2035 due to diverse factors, including its role in backing up intermittent renewables, lower emissions intensity, operational flexibility, contribution to cost-effective electricity generation, importance in industrial heat processes, compatibility with hydrogen blending, and its technological maturity. Mexico has significant renewable potential, but renewables cannot replace natural gas in the short to medium term without destabilizing the grid or undermining industrial competitiveness. We are at a relevant moment, and I envision these possible scenarios: (1) Mexico accomplishes effective regulatory implementation, expands infrastructure, builds storage, accelerates LNG deployment, and aligns energy strategy with industrial growth. (2) Progress occurs but is slow and uneven. Natural gas continues to fuel competitiveness, but systemic risks remain, and (3) the most pessimistic: regulatory delays, insufficient storage, and infrastructure bottlenecks constrain industrial growth (Mexico loses part of the nearshoring window).  The difference between the first and second scenarios is execution, the difference between the second and third is urgency.

In conclusion, Mexico cannot afford passive strategies. It cannot wait another six years to start implementing its national strategies, it cannot afford slow implementation and to underestimate its vulnerabilities.