Mexico to Continue Importing Natural Gas in 2023

Mexico will continue to import natural gas in 2023 due to its declining production, which fails to meet the growing demand for the fuel, which ranks as the most consumed in the country since 2014.

“Natural gas’ participation in the energy mix exceeds 48 percent and continues to rise. For the last two decades, it has been the energy source with the greatest dynamism and has exceeded the growth in demand for electricity, as well as economic growth,” reads a report by the Economic Commission for Latin America and the Caribbean (CEPAL).

The dynamism experienced by natural gas has been boosted by the electricity industry, which quadrupled its demand for the fuel between 2000 and 2019, raising Mexico’s demand for natural gas by 95 percent during this period.

Since production has not been able to keep up with demand, the gap has had to be closed with imports that today represent 70 percent of the total consumption and up to 93 percent if dry gas consumed by the oil industry is excluded, according to CEPAL. Ninety-six percent of the external natural gas supply comes from the US.

While importing natural gas from the US remains affordable due to prices and distance, there are about 248Tcf of gas under Mexican soil, according to the National Hydrocarbons Commission (CNH). To exploit these resources, Mexico should “take advantage of the latest unconventional technologies, like slick water fracturing and horizontal drilling. Of course, there is one more ingredient needed: huge investments,” wrote for MBN José Luis Mercado Ponce, Commercial and Institution Relations Vice President, Grupo México Infraestructura.

Mexican imports will continue to grow unless the policy of self-sufficiency, security and sovereignty of the current administration succeeds, warned CEPAL. “Declining production of natural gas in Mexico has made the country a net importer of this fuel and the second largest market in the world in terms of net imports of natural gas, only behind Germany,” reads the report.

Natural Gas: The Alternative Fuel for Sustainable Mobility

While natural gas’ popularity has grown exponentially within the electricity industry, the automotive sector has also turned to this fuel as a more sustainable alternative than gasoline and a more cost-effective solution than electrified vehicles. However, there is still a long path to cover in terms of infrastructure and public policies, Andrés Bayona, President, AMGNV, told MBN.

Vehicular natural gas requires the development of technology for its use, with collaboration with several players within the automotive industry, infrastructure builders, financial institutions and natural gas distributors, in addition to government participation, says Bayona: “The key is to have the participation of the government as the transition involves many extensive and complex requirements that lead to long waiting times to gain regulatory approvals.”