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Mexico’s First NatGas Pipeline EBBs Coming Online, But Key Rules Still in Development

Natural gas transporters in Mexico are implementing the pipeline electronic bulletin boards (EBBs) required under new market rules, but key regulations are not yet in place for the main network, the Integrated Natural Gas Transport and Storage System (Sistrangas).

National pipeline administrator Cenagas has already put online the EBBs for the two pipeline systems it operates as a transporter, the national SNG system and the isolated Naco-Hermosillo network, while independent gas transporters are in various stages of implementing the EBBs for their pipelines.

The design and contents of the EBBs are based on the requirements outlined in the market’s open access rules, published in 2015 by Mexico’s energy regulator, the Comision Reguladora de Energia (CRE).

For now, no such requirements currently exist for integrated systems like Sistrangas, which comprises the SNG and six privately owned systems, totaling almost 11,000 kilometers (6,835 miles) of pipelines and 6.2 Bcf/d in gas capacity.

As the independent technical operator of Sistrangas, Cenagas is not obligated to create a bulletin board for the network until CRE enacts the pending regulations. But rather than wait for those rules, the operator plans to begin posting information for the integrated system as soon as it becomes available.

“We are emulating the existing regulations to apply best practices,” Eduardo Prud’homme, head of the technical and planning unit at Cenagas, told NGI.

In the first weeks of operation, Cenagas has been more lenient with nominations to the system as users familiarize themselves with the new market rules, Prud’homme said. The data points being collected from these nominations -- firm and interruptible capacity, in particular -- will serve as the basis for the initial version of the Sistrangas EBB.

“I would say that by October it’s very likely that we will have consolidated the bulletin board for the national integrated system,” Cenagas director David Madero told NGI.

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CRE expects to release a draft of the administrative rules for integrated systems during the fourth quarter of 2017. Once finalized, these rules will specify the format and contents of the Sistrangas bulletin board, although the regulator said the information will essentially be the same as in the 2015 requirements for the EBBs of individual transporters.

Electronic bulletin boards in the U.S. and Europe have served as references in the design of the EBB rules for the Mexican market, according to CRE. The platform which Cenagas has installed to manages its EBBs, for example, is an out-of-the-box software solution in compliance with North American Energy Standards Board mandates, Prud’homme said.

“The integrated bulletin boards will probably be very similar to international standards,” he added.

For Mexican authorities, the information provided by the EBBs, as well as a wholesale price reporting system overseen by CRE, is fundamental to the development of an open and competitive gas market, one that is currently in the very early stages. On July 1, CRE began enforcing the new capacity-based contracting model, after Cenagas held its first open season in May for domestic pipeline capacity on Sistrangas.

The EBB would eventually become the platform for shippers to release their excess capacity on Sistrangas. CRE is still working on the rules for a secondary capacity market.

The consolidated Sistrangas EBB would also include maintenance and other service notifications that transporters in the integrated system must currently report through their individual bulletin boards.

“We would need homogenized and automated information from the [other] transporters to be able to aggregate it,” Prud’homme says. “However, in order for us to do that, we need the general rules and regulations for integrated systems to require the transporters to provide that information.”

The open access rules, along with their EBB requirements, also apply to Mexico’s privately operated gas pipelines. These systems either interconnect with or are completely independent from Sistrangas.

Most private transporters have already launched their EBBs or are in the final stages of testing the platforms. For example, TransCanada and IEnova, who have experience in operating EBBs in the U.S., already have their systems in place.

The rules specify about 25 different types of data points that must be incorporated into the EBBs, requirements which some transporters have found burdensome.

“The scope of what the regulator has asked for, the quantity of information that we are required to publish, is excessive,” Fermaca’s Raul Monteforte, chief development officer at the private pipeline developer, told NGI. “It’s not a usual platform in the industry, particularly in North America, so the lack of standardization and deviation from normal industry practices create additional complications, regulatory burdens and costs for transporters.”

To that end, the regulator CRE is working on revisions to the 2015 open access rules, with a draft proposal due out later this year.

“It’s worth noting that the proposal identifies information, processes and requirements that could be made much more flexible, to the benefit of participants and the market in general,” according to a statement from the natural gas unit of CRE.

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