Goodbye to Low Gas Prices, Hello to LNG InvestmentBy Peter Appleby | Thu, 07/16/2020 - 17:07
The low prices that Mexican consumers have been enjoying at retail sites have now ended with the highest rise in gas prices since 2017’s gasolinazo. Sempra Energy is set to invest US$2.4 billion in its Ensenada LNG plant and Grupo Protexa is using its skills to construct a new respirator to help COVID-19 patients. Meanwhile, well-drilling figures plunge worldwide but, as the Energy Reform progresses, Mexico’s offshore arena is likely to be one of the few hotspots in the mid to long-term future.
All this and more in the Week in Oil and Gas.
One of the foremost Mexican service companies announced it has teamed up with Mexico City’s General Hospital Dr. Eduardo Liceaga to engineer and manufacture a respirator to be used in the fight against COVID-19. The company’s XLab innovation facility is applying its technical knowledge and, with the medical guidance of health professionals from General Hospital Dr. Eduardo Liceaga, is progressing well with its respirator model, named Tidal. The prototype must first be certified by COFEPRIS before it can be put forward for mass production and use nationwide.
Despite the downturn and difficulties in the international energy market, Sempra Energy is set to expand its facilities at its Energía Costa Azul LNG facilities in Ensenada, Baja California with investments of up to US$2.4 billion. The expansion will improve the facility’s ability to transport, store and distribute LNG for trade to international markets, particularly Asia.
Mexico has experienced the greatest hike in gasoline prices since 2017 after prices for Magna gas rose 8.9 percent according to INEGI data. The rise comes off the back of low gasoline prices that arrived ahead of April’s international price collapse that took market prices negative.
Meanwhile, international market prices have found an equilibrium after last week’s price jolt following reclosures in cities around the world due to new outbreak of COVID-19.
A new report from Norway’s Rystad Energy states that figures for wells drilled are to fall to a 20-year low in 2020. The firm predicts that some 55,350 wells will be drilled this year in comparison to the 71,964 wells drilled last year. While 2021 will see a recovery in well drilling, Rystad predicts that the drilling industry is “unlikely to recover to 2019 levels soon.” However, the firm counts Mexico among a list of offshore areas that sees positivity in drilling in the mid to long-term future.