Mexico’s Gas Imports Reach Historic Levels

Mexico is importing gas from the US at historic levels. Despite a lower demand, January to June LP gas imports to Mexico totaled 187,000 daily barrels, compared to 91,000 barrels produced by PEMEX.

The United States Department of Energy expects gas exports to Mexico to increase in the coming months and years, mainly due to a decline in Mexico gas production. Reports from the U.S. Energy Information Administration (EIA) have announced that new monthly gas exports records to Mexico are common, and that while the country has improved and enlarged its gas pipeline infrastructure, it has become increasingly reliant on U.S. imports.

In June, imports from the US surpassed 7 billion cubic feet per day; the highest day that month was the 17th. Other data released by the US EIA shows that in the past years, Mexico’s been increasingly dependent on foreign gas imports. To illustrate, in 2015, only 40 percent of Mexico’s gas supply came from imports; this year, that number amounts to 76 percent. Mexico has also reduced its national production. For instance, in 2013, 6.3 billion cubic feet of natural gas was produced daily by PEMEX and by 2021, that number had declined to 2.3 billion.

In an interview for MBN, Jaime Brito, Vice President of Stratas Advisors, was asked about PEMEX’s future and its production facilities heading into the future. In regards to its refinery system, Brito commented that “the refining system in Mexico has two structural problems, which everybody is aware of. One is the lack of deep conversion capabilities, which means that you need deeper conversion processing power to destroy all of the fuel oil and produce larger amounts of gasoline and diesel. The other is that the production of light sweet crude has declined, particularly the Olmeca mix.”

Moreover, Brito explained PEMEX’s options for the future: “One is to invest in reversing this decrease of light sweet crude production. The other is to import that same crude. For historical, social and political reasons, Mexico has not been allowed to import crude.”