Of the several natural gas pipeline projects under construction in Mexico, Fermaca’s Waha-to-Guadalajara system holds the most potential as an outlet for gas produced in the Permian Basin, according to RBN Energy LLC.

“That’s a segment that could really open up and get Permian gas that just now stops essentially in northwest Mexico…all the way to central Mexico,” RBN analyst Jason Ferguson said at the US-Mexico Natural Gas Forum earlier in November in San Antonio, TX.

VIEW PRICING NOW: NGI’s Mexico Gas Price Index calculates natural gas pricing on the border and within Mexico daily.

The final segment of the colloquially named “Wahalajara” system comprises the 232-mile, 886 MMcf/d, Villa de Reyes-Aguascalientes-Guadalajara section, which is expected to enter service in early 2020.

Direct exports from the Waha hub in the Permian to Mexico have averaged about 0.5 Bcf/d over the last two months, Ferguson said. He cited that flows from Waha to the Mexican border have been well below the combined 3.1 Bcf/d of capacity on the Roadrunner, Trans-Pecos and Comanche Trail pipelines. The gas is mainly serving power generation plants in northwestern Mexico.

Looking ahead, he said, the proposed Energía Costa Azul liquefied natural gas export project on Mexico’s Pacific coast could provide a westbound outlet for Waha gas, as significant westbound gas demand increase from the Permian “would be from LNG.”

Kinder Morgan Inc.’s Gulf Coast Express pipeline, which ramped up recently, has provided temporary relief to Permian gas prices, reducing basis differentials between Waha and Henry Hub.

“We’ll see how long that lasts,” Ferguson said. “We think probably a few more months…there will be some issues likely next year.”

The prospects for Permian gas prices were not helped by the recent postponement by Kinder of the in-service date for its 2.1 Bcf/d Permian Highway Pipeline (PHP) to early 2021. PHP would transport gas from Waha to the Texas Coast and Mexico markets.

There is currently “not a stellar outlook” for Permian gas prices through 2020, Ferguson said, although that fact is “certainly an opportunity for those buying gas, including Mexico.”