PEMEX Appears to Retake Plans to Fix Flaring
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PEMEX Appears to Retake Plans to Fix Flaring

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Perla Velasco By Perla Velasco | Journalist & Industry Analyst - Thu, 11/24/2022 - 08:00

PEMEX announced that it will gradually stop flaring at the Ixachi field. According to its directors, flaring will stop completely at Ixachi by January 15, 2023. The announcement aligns with recent government promises to protect the country’s environment. PEMEX was fined MX$42 million (US$2 million) for breaching its anti-emissions plans at Ixachi earlier this year. 

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CRE Goes on Permit-Approval Spree In 2022

Selling gasoline and diesel is regulated by permits approved by regulator CRE, but this permitting has slowed down in recent years, partly due to the pandemic. In 2016, a total of 679 permits were issued, but that number decreased. By 2021, only 114 permits were approved. However, this year the CRE has approved more permits than in the previous two years combined. From January to September 2022, CRE released 300 permits to service stations, a 275 percent year-over-year increase. Fifty percent of the permits were approved this September.

PEMEX Appears to Risk Fines Rather than Imperiling Production

Pressured to meet production goals, PEMEX seemingly runs the risk of possible negative consequences. Despite possible fines and mounting environmental damage, the company continues its production without addressing its flaring issues.  Reuters reported that the two most recent fines could each reach MX$120 million (US$6.2 million. Nevertheless, in the NOC’s view, they represent a small price to pay to reach productive objectives imposed by President López Obrador. PEMEX was fined MX$42 million (US$2 million) for breaching its plans at Ixachi earlier this year. These fines are the highest individual fines ever imposed by CNH.

Mexico Seeks Gas Storage Options

Mexico continues to look for gas storage options in the US, aiming to create an energy reserve for emergencies. Lacking storage has long since been pointed out as a weak spot in the country’s mission to become energy-independent. In 2021, Mexico faced turbulent times due to natural gas shortages on the back of a winter storm in Texas. The high demand for US gas from Europe significantly increased the cost of gas in 2022. 

LP Gas Price Continues to Decrease in Mexico

According to the federal government, this has been the third consecutive week of decreasing liquified petroleum (LP) gas prices in the country.  The prices show the newly applied methodology by the regulator to safeguard affordable LP gas prices for people across Mexico who rely on gas for cooking. Next week, the maximum price of this fuel in Mexico City is expected to be at MX$10.96/kg (US$0.56/kg) and at MX20.30/kg (US$1.04/kg). The highest price for this fuel is found in the municipalities of Loreto and Mulege in Baja California, where it reaches MX$24.90/kg (US$1.28/kg).

PEMEX to Stop Flaring in Ixachi by 2023

According to PEMEX CEO Octavio Romero Oropeza, the plant at Ixachi will receive 300MMcf/d of gas that will be processed to avoid flaring. PEMEX announced that by December 15, 2022, the Papan Measurement and Control Station (EMC) will be able to process 150MMcf and by January 15, 2023, its capacity will increase to 300MMcf, thus stopping flaring altogether. The NOC has been widely criticized for excessive flaring necessary due to the lack of infrastructure to process all the gas it extracts and for causing environmental harm.

PEMEX and New Fortress Sign Billion-Dollar Contract

New Fortress Energy and PEMEX finalized agreements to develop and operate an integrated upstream and natural gas liquefaction project at Lakach. The two companies will join efforts to resume development in the deepwater gas field Lakach. NFE will develop an LNG plant over a period of two years and will complete seven offshore wells and the deployment of a 1.4MTPA Sevan Driller floating LNG unit to liquefy most of the gas obtained from the field.

CNH Approves Exploration Plans; CRE Approves Permits

The National Hydrocarbons Commission (CNH) approved exploration plans for TotalEnergies, Eni, Repsol and Shell. Meanwhile, CRE released 43 permits for the marketing of diesel and gasoline. The regulator has been struggling to release permits on the back of the pandemic, with some requests being put on hold for 24 months.

Photo by:   Twitter @Pemex

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