Natural gas marketers in Mexico transacted a record high volume of 8.07 Bcf/d in August, according to the IPGN monthly gas price index published by the Comisión Reguladora de Energía (CRE).

The previous record of 7.56 Bcf/d had been set in July.

Twenty-six marketers reported transactions in August, also a record for the IPGN, which the CRE began publishing in July 2017.  Marketers reported 293 deals in August, down from 347 in the previous month.

Prices averaged $2.85/MMBtu, up from $2.62/MMBtu.

The IPGN divides Mexico into six trading regions. Region 5, which includes the capital, Mexico City, recorded the highest average price, at $3.68/MMBtu.

Region 1, which covers the northwestern states of Baja California, Sonora, and Sinaloa, reported the lowest average price at $1.76/MMBtu.

Region 3, which comprises the northeastern border states of Nuevo León and Tamaulipas, saw the highest volume of gas transacted at 3.34 Bcf/d.

Created under the framework of Mexico’s 2013-2014 constitutional energy reform, the IPGN is meant to serve as a reference for prices until the gas market attains enough liquidity and transparency for third-party indexes to emerge.

Due to Mexico’s dependence on pipeline imports from the United States, a majority of gas transactions in Mexico are priced using U.S. indexes such as Henry Hub or Houston Ship Channel, plus the cost of transport.

Imports accounted for 68% of Mexico’s natural gas supply in July 2019, the latest month for which data is available, up from 66% in July 2018.

Excluding gas consumed by state oil company Petróleos Mexicanos (Pemex), imports accounted for 90% of national supply, up from 89%.

Nationwide production of natural gas, including output from Pemex and the private sector, averaged 3.76 Bcf/d in August, up from 3.63 Bcf/d at the same time last year, according to the Comisión Nacional de Hidrocarburos (CNH).

Pipeline Buildout Continues

Mexico’s natural gas import capacity rose by 40% in late August after the commercial startup of the 2.6 Bcf/d Sur de Texas-Tuxpan natural gas pipeline.

The milestone had been delayed by a contractual dispute between developer Infraestructura Marina del Golfo (IMG) and anchor customer Comisión Federal de Electricidad (CFE), Mexico’s state-owned power company.

The government announced on August 27 that CFE had renegotiated the terms of its firm transport capacity agreement with IMG, a joint venture between TC Energy Corp. and Infraestructura ENergética Nova (IEnova).

CFE concurrently reached similar bilateral agreements with IEnova, TC Energy and Grupo Carso regarding the Guaymas-El Oro, Tuxpan-Tula, Tula-Villa de Reyes and Samalayuca-Sásabe pipelines.

On Sept. 11, CFE announced a corresponding agreement with Mexican company Fermaca on the final two sections of the informally named Wahalajara pipeline system.

The sections comprise La Laguna-Aguascalientes and Villa de Reyes-Aguascalientes-Guadalajara, which will have the capacity to transport 1.189 Bcf/d and 886 MMcf/d, respectively.

Local newspaper El Financiero this week quoted Fermaca’s Raul Monteforte, chief development officer, as saying that he expects the two pipelines to enter service in Oct. 2019 and 1Q2020, respectively.

Startup dates for the other pipelines remain unclear.

TC Energy’s Tuxpan-Tula and Tula-Villa de Reyes pipes are held up by the pending completion of an indigenous consultation and archaeological rescue, respectively.

Once these steps are concluded, the remaining construction time for the projects will be 12 months and 11 months, respectively, according to a document published in August by energy ministry Sener.

Grupo Carso said in an August 27 regulatory filing that the 472 MMcf/d Samalayuca Sásabe pipeline was still under construction, but did not provide an expected in-service date.