Natural Gas Crucial for 2025–2030 Strengthening, Expansion Plan

The Plan for Strengthening and Expanding the National Electricity System (2025–2030) is a pivotal initiative presented by President Claudia Sheinbaum to modernize Mexico’s electricity infrastructure and strengthen its energy sovereignty. The plan entails adding a total of 29,074MW of new generation capacity by 2030, of which 22,674MW will be developed by CFE and the remaining capacity by private entities.

Within CFE’s contribution, combined-cycle gas and cogeneration plants play a significant role. The plan outlines the addition of combined-cycle gas plants and internal combustion units, as well as cogeneration facilities developed in partnership with PEMEX. Five combined-cycle gas plants are scheduled between 2028 and 2029, adding 3,425MW of capacity with an investment of approximately US$2.662 billion, while three cogeneration plants (CFE-PEMEX) are expected to become operational between 2029 and 2030, adding 2,422MW, with an estimated investment of US$2.059 billion.

These gas-related technologies are critical components of the overall generation strategy. They provide flexible and reliable power to complement intermittent renewable sources such as wind and solar, while contributing to the expansion of gas-based generation in the national energy mix.

President Claudia Sheinbaum has emphasized the strategic importance of greater gas self-sufficiency to support the plan. She stated that beyond strengthening oil production, refining, petrochemicals, and fertilizers, one of the great priorities is to ensure greater autonomy in gas for the country. She mentioned that PEMEX is being entrusted, alongside CFE and academic institutions such as the Mexican Oil Institute (IMP), to analyze the viability of domestic gas production.

This emphasis on gas self-sufficiency is reinforced by PEMEX’s own 2025–2030 work plan, which targets raising natural gas production to 5Bcf/d through public investments of approximately MX$238 billion (US$12.763 billion) and extensive drilling efforts.

Taken together, the gas-related elements of the electricity plan reflect dual strategies: first, deploying combined-cycle and cogeneration capacity to rapidly scale dispatchable electricity; second, securing upstream gas supply through PEMEX to strengthen national self-reliance and energy security.

Current Outlook

Nonetheless, the NOC faces important challenges to increase its gas production. One of the main obstacles is declining output from mature fields, as many of PEMEX’s largest gas-producing assets have been in operation for decades and are showing reduced productivity. At the same time, limited investment capacity within PEMEX has constrained exploration and development of new fields, particularly in deepwater and unconventional reserves.

Regulatory uncertainty and shifting energy policies have also discouraged private investment, reducing opportunities for joint ventures that could bring additional technology and capital. Furthermore, Mexico remains highly dependent on US natural gas imports, which currently supply over 70% of domestic demand; decreasing this reliance requires expanding national infrastructure, including pipelines, storage, and processing facilities.

Finally, environmental and political debates over fracking pose further delays to unconventional gas development, making it difficult to accelerate domestic production without a broader policy consensus.

The end of 2024 shows that Mexico’s total natural gas production averaged approximately 3.451Bcf/d, a decline from prior years such as 2023, when production was around 3.728Bcf/d. In 2Q25, PEMEX reported average natural gas production of 3.59Bcf/d. Historically, Mexico’s natural gas output has seen a downward trend from its peak in the early 2010s. In 2013, total production reached over 5Bcf/d, but in recent years, this has declined to roughly 3.4–3.7Bcf/d.

Is Fracking on the Table?

Experts have continually pointed out the potential that unconventional plays present for Mexico, however, this administration has made clear that it will not be involved in fracking.

“Opportunities are substantial, rooted in Mexico's highly diverse resource portfolio. The country possesses mature onshore fields, with some remaining exploration potential. A significant public discourse is underway regarding non-conventional resources like shale gas and oil. Should this debate conclude with a decision to open these areas to exploration, this would require the development of an entirely new industry segment. There is much to learn from developments in places like Texas and Argentina in this regard,” says Thibaud Cadieu, General Manager, XWELLS.

Recently, PEMEX Director General Víctor Rodríguez clarified that the company's 2025-2035 Strategic Plan does not include the exploitation of unconventional shale resources through hydraulic fracturing, or fracking. Rodríguez Padilla stated that PEMEX's strategy focuses on conventional deposits in the Southeastern and Veracruz Basins, not on shale resources.

Rodríguez Padilla’s comments directly address previous speculation that the company would reverse the prior administration’s opposition to fracking. The new plan, he said, will instead leverage advancements in technology to explore complex geology in traditional, conventional sand deposits. This approach requires greater investment and technical expertise but avoids the use of fracking for shale. Rodríguez noted that the definition of traditional resources has evolved over time, with what was once considered "extraordinary" now being classified as conventional.

President Sheinbaum has emphasized the need to reduce Mexico’s reliance on imported natural gas, noting the country’s supply currently comes from Texas, much of it produced through fracking. She highlighted the strategic importance of strengthening domestic production to enhance energy sovereignty, given natural gas’ role in powering electricity generation, industrial activity, and residential demand. Sheinbaum reiterated her opposition to traditional shale gas fracking due to environmental concerns, she stated that the government is exploring less damaging extraction methods. Existing long-term contracts with US suppliers will remain in place, but increasing Mexico’s production capacity is considered essential to reduce dependency and secure energy self-sufficiency.