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Mexico Holding Import Pipeline Capacity Auction This Week

The last piece in Mexico’s inaugural natural gas market opening process fell into place this week as pipeline network system operator Centro Nacional de Control de Gas Natural (Cenagas) on Monday published terms for its first importation infrastructure capacity auction, to be held on Friday (Feb. 17).

Accredited marketers, National Pipeline System (Sistrangas) users with a valid Cenagas contract, and final users directly interconnected to Sistrangas may register to participate in person by Thursday at Cenagas’ offices in Mexico City. Participants may submit only one offer for each importation duct, or pipeline.

The auction is scheduled to be conducted on Friday in a public ceremony, but official results will not be sent to auction winners and state energy company Petroleos Mexicanos, or Pemex, until Feb. 21.

According to Energy Regulatory Commission directives, 753,722 MMBtu/d would be available for bidding on the NET Mexico Pipeline in Texas, which connects with the Agua Dulce hub, and Los Ramones Norte pipeline in Mexico (map). Information on the capacity estimates for the EFM-Nueces, Southcross-Nueces, ETP-Delmita and DCP-Gulf Plains injection points is available from the secretary of energy.

The auction winners would be determined based on U.S. dollar-denominated maximum unit surcharge per billion BTU, to be added to the exit tariff, until the entire capacity is exhausted. Participants may be assigned a partial amount, only if they agree to it in writing. In case of a tie on prices between offers that exceed the available capacity, the latter would be prorated among offers that have agreed to partial assignments.

The applicable tariff for each auction would be the one offered by the last successful participant. If available capacity is not exhausted, the exit tariff would apply.

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