During the 2017 Platts Mexican Energy Conference, PA’s Oil & Gas expert, Bill McAleb, provided an insightful presentation on the topic of “Natural Gas Markets in Mexico – Current State of the Markets and New Directions” and discussed opportunities in the Mexico market, including:
The following summary includes the highlights from the presentation.
Domestic production is expected to continue to lag demand… as a result, Mexico has a high dependence on U.S. infrastructure and exports of natural gas.
Figure 1: Complex Oil and Gas Value Chain
Figure 2: SISTRANGAS Pipeline System (Source: CENAGAS)
Figure 3: CENAGAS Open Season (Source: CENAGAS)
Figure 4: 2017 Mexican Natural Gas Demand and Supply (mmcf/d)
The reorganization of the Mexican energy sector through the Energy Reform has opened the door for competition and investment in deregulated Mexican oil and gas markets and infrastructure. Mexico is likely to remain a top, emerging energy market for investors, driven by continued need for build-out of Mexico’s natural gas midstream system and expansion of hydrocarbon production.
Mexico faces the twin challenges of system imbalances and domestic energy security evidenced by current lack of natural gas storage, and increasing reliance on U.S. natural gas exports. To meet system imbalances, the country currently relies considerably on LNG infrastructure system that alleviates bottlenecks. Mexico’s gas storage need is beginning to be addressed through drafting of new policy by the Secretary of Energy as well as strategic storage project development. To enhance domestic energy security, Mexico is continuing to make important hydrocarbon discoveries, and encouraging domestic production through competitive auction rounds assigning leases of reserves.
The Energy Reform is transforming the Mexican market and spurring significant growth and investment opportunities across the sector including natural gas pipelines, storage, and oil and gas production.