Mexico Will Need US Natural Gas Despite Domestic Production

Natrual Gas

For the next decade, Mexico will largely depend on the United States for natural gas imports, despite government’s efforts to maintain self-sufficiency, data and analytics company GlobalData reported.

At present, Mexico is counting on the US natural gas pipeline exports, via Texas, to avoid struggling with deficits of natural gas supply.

GlobalData stated: “Without a comprehensive strategy that considers development of large natural gas resources, both onshore and offshore, it will be difficult to reduce the volume of imports demanded for power generation and industrial use.”

According to the industry experts, the current approach of Mexican government to boost domestic resource development is out of place. It has made difficult for the country to cut down its energy dependence, as state-owned oil and gas company, Pemex lacks adequate capital to work independently on capital-intensive gas development projects.

Moreover, Mexico’s resource development may possibly be further hindered due to government’s restrictions on the bidding rounds for the pro-tem.

Mexico is identifying ways to scale down its soaring dependency on US natural gas imports, which are already meeting over 50 percent of the demand. This ratio counts for the highest overseas gas dependency rate in the world, as stated by a senior adviser to Mexico’s president Andres Manuel Lopez Obrador.

GlobalData further projected, “In the short and mid-term, Mexico’s natural gas production decline could be alleviated by developing key upstream projects but this is unlikely given the current strategy led by the Mexican government.”

Concurrently, the exports for US natural gas pipeline to Mexico are rapidly scaling, resulting from augmentation of cross-border pipeline capacity, the Energy Information Administration (EIA) has claimed.

The increase in Liquefied Natural Gas (LNG) exports and pipeline exports to Mexico, made US a net natural gas exporter for two consecutive years in 2017-18. Whereas, the total exports of natural gas to Mexico thorugh pipeline has exceeded 5 Bcf/d in July 2018, according to the EIA reports published earlier this year.

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