Alberto Escofet
Regional Manager
View from the Top

Natural Gas Responds to Energy Security Concerns

Wed, 02/21/2018 - 17:33

Mexico is becoming more focused on increasing its usage of natural gas which is cheaper, cleaner and will help the country reach its greenhouse emissions reduction goals, according to Alberto Escofet, Regional Manager of Enagás México. Even though natural gas has clear advantages over fossil fuels, its penetration here is still low, which is where Enagás sees opportunity. “We see great potential in the country and want to help it reach its goals,” says Escofet.

Present in Mexico since 2011, Enagás has already shown its commitment to the country by becoming an active participant in three important natural gas infrastructure assets: Altamira, Morelos and Soto la Marina. “With the Altamira LNG terminal, operated and 40 percent owned by Enagás, we have a very strategic role in Mexico since it is the only liquefied natural gas plant on the country's Atlantic coast,” Escofet says. The 171km-long Morelos gas pipeline, which Enagás operates and owns 50 percent, is located in a strategic region capable of gasifying the whole south Pacific coast of Mexico. The Soto la Marina compression station’s interconnection with the San Fernando-Cempoala pipeline increases the country’s transportation capacity.

Escofet says Enagás is still looking for opportunities in the physical assets business division, where the company can offer a higher added value. To achieve a leadership position, Escofet cites innovation and a constant search for the most effective technologies to constantly offer better service. But before spending on new infrastructure, Escofet says it is necessary to make sure that any new technologies will fit with the existing ones. “Our broad knowledge means we know how to complement new technologies with existing and potential assets, always ensuring that profitability comes first.”

One innovative technology of interest to Enagás is that of virtual pipelines, given the country’s vastness and hard-to-reach areas. “Physical pipelines are not the only way to gasify regions. Virtual pipelines can move gas by wheels, trains or even ships, making them much more flexible in the regions to be reached and the volumes to handle,” says Escofet. He says these virtual pipelines are attractive because they avoid the need for a large investment such as that a physical pipeline would require, and also create their own natural gas demand. “When a region gets natural gas via virtual pipelines, more equipment that uses natural gas is installed, meaning that the demand for natural gas increases. After a while, that volume can justify the construction of a physical pipeline.”

Enagás also wants to broaden its horizons beyond transmission and compression infrastructure, and with increasing demand for natural gas, the company has also identified opportunities in storage. “Electricity cannot be stored yet, making the storage of energy resources, such as natural gas, critical for the country's energy security,” he says. In December 2017, the Ministry of Energy began a public consultation to review the Energy Public Policy Applicable to the Constitution of Natural Gas Storage and with this, Escofet believes Mexico will take one step closer to the required investments to ensure the country’s energy security. The draft also highlights the importance of Enagás’ Altamira asset. “The draft shows the Altamira regasification plant is one of the infrastructures that could ensure energy security. During May and June 2017, the plant increased its operations to cover the reduction in natural gas flow from the US. Additionally, in August 2017 due to Hurricane Harvey, the Altamira regasification plant operated at maximum capacity to cover this shortfall.”

Enagás is not the only player to have identified this opportunity, which is why Escofet realizes it must offer a differentiating factor. In this respect, it wants to contribute its expertise in novel methods, such as underground storage facilities. “New methods for underground storage of natural gas include injecting it into underground caves and depleted oil and gas wells,” he explains. “Enagás has broad experience with these methods in Spain, and is looking for projects in Mexico.” He believes that as the public consultation shows the need for more storage capacity, CENAGAS will be able to launch auctions for the creation of more storage facilities.