Mexico’s Comisión Reguladora de Energía (CRE) has approved a new set of rules designed to improve operational discipline and efficiency on the Sistrangas national pipeline grid.

“During 2018 and 2019, the daily operation of the Sistrangas has shown repeated gas flow imbalances throughout the day due to natural gas extracted in excess (extractions greater than injections) or lack of natural gas injection (injections less than extractions) on the part of users, which generates an operational situation that puts the Sistrangas at risk,” CRE said in a resolution approving the rules.

The chronic imbalances reduce “the permissible operating pressure and puts at risk the provision of the transport service for the rest of the users,” the resolution continued.

Mexico has no underground natural gas storage capacity, and instead relies on imported liquefied natural gas (LNG) and line packing for system balancing.

Determining who is responsible for the imbalances, and assigning the costs accordingly, has proven tricky for the Centro Nacional de Control del Gas Natural (Cenagas), the independent operator of the Sistrangas. Cenagas was created in 2014 under the framework of Mexico’s 2013 constitutional energy reform, which sought to liberalize the state-dominated energy sector.

The new rules seek to promote operational discipline among system users; support transparency in the methodologies used to determine imbalances among users; resolve solvency problems at Cenagas; and provide real and precise information to users on a monthly basis with respect to their injections and extractions.

Cenagas will be required to publish a monthly report on its electronic bulletin board of all the actions it undertook in the preceding month to balance the system, and the users responsible for system imbalances.

Part of the reason system balancing is currently so challenging is a lack of sufficient meters throughout the system, the resolution said.

Since its creation, Cenagas has faced “the impossibility of having daily measurement information generated by the integrated transport systems corresponding to the quantities of gas transported by Sistrangas users,” the resolution said.

As a result, Cenagas does not know with precision the daily consumption of system users, “leaving users in a state of uncertainty and inefficiency to solicit the remediation of their imbalances” in a given day.

Although Cenagas has penalized users for creating system imbalances, a lack of operational discipline by users continues to plague the system, CRE said.

To correct system imbalances, Cenagas typically adjusts users’ reception and delivery of gas by tweaking nomination schedules. If this is insufficient, Cenagas resorts to the injection of LNG to avoid critical alerts on the grid.

“Intervention by Cenagas through the purchase of LNG has [restored] the operating conditions of the Sistrangas,” the resolution said. “However, users continue consuming greater quantities than those scheduled by Cenagas. This has caused Cenagas to incur financial costs that on occasion, have been unrecoverable, putting [Cenagas] in financial insolvency since it does not have suitable mechanisms to charge for LNG injected into the Sistrangas.”

Steadily rising gas demand from the industrial segment, growing electricity demand and plummeting domestic natural gas production also have been driving factors behind the system imbalances, CRE said.

The different pipeline systems that comprise Cenagas were formerly operated by national oil company Petróleos Mexicanos (Pemex). However, since the reform’s asymmetrical regulations prohibit a system operator from also buying and selling gas, Pemex ceded control of the pipeline network to Cenagas.

In 2018, under the previous government, energy ministry Sener finalized a natural gas storage policy that mandated the addition of 45 Bcf of underground storage capacity by 2026. The depleted Jaf gas field in Veracruz state was chosen as the most viable site to launch a tender for an initial 10 Bcf project.

The new administration has not indicated whether it plans to proceed with the tender.

Click to view the CRE resolution and the new system balancing rules in Spanish.