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News Article

Mexico-US Natural Gas Infrastructure to Be Expanded

By Cas Biekmann | Mon, 07/13/2020 - 14:37

Even though Mexico does have the capacity to exploit its own natural gas resources, drilling for gas needs a lot of investment. Importing gas from the US is therefore Mexico’s preferred strategy. As gas trade remains steady and even appears to be increasing according to S&P Global, countries on both sides of the border aim to collaborate to update and construct infrastructure to support this mutually beneficial exchange.

Based on a report by ICIS, this collaboration is currently boosted by Mexico’s Transmission System Operator (TSO), CENAGAS. As per annual public consultation, CENAGAS said its cooperation with private companies had been very positive, spurring further collaboration. Pipelines between the US and Mexico are crucial for this.

A project in Reynosa hopes to address import congestions, which includes an expansion of pipelines on both sides of the border at the Las Adelitas hub. Through this, the south of Texas would have access to different routes to export its gas to Mexico. This expansion will be managed by CENAGAS. The Mexican developer in charge will be IEnova, while Enbridge will work on the US side of the border. The project will include one interconnection, which can be expanded to interconnect 10 pipes in the area around the Agua Dulce hub, with an 8 billion bcf capacity per day, an Enbridge spokesperson told ICIS.

Recently, CRE greenlighted CENAGAS’ projects outlined in its 2020-2024 Plan Quinquenal (five-year plan). Even though getting CRE’s blessing is technically not a necessity, it is considered a boon for public opinion. ICIS further cited former SENER official Daniela Flores, who advises private companies to watch the plan closely and ready themselves for the ‘open season’ opportunities that will arise when plans move into action.

Other projects, such as Mirage Energy’s plans to develop cross-border capacity to provide Permian Basin gas producers further access to Mexican markets, are of importance as well, according to a report by NGI. This pipeline would then be interconnected through the Concho-Progreso pipeline, which stretches past the US-Mexico border.

The data used in this article was sourced from:  
S&P Global, ICIS, NGI
Cas Biekmann Cas Biekmann Journalist and Industry Analyst