Editor’s Note: NGI’s Mexico Gas Price Index, a leader tracking Mexico’s natural gas market reform, is offering the following column by Eduardo Prud’homme as part of a regular series on understanding this process.

With the start of activity on the Sur de Texas-Tuxpan, La Laguna-Aguascalientes and Villa de Reyes-Aguascalientes-Guadalajara pipelines since December 2018, the government of Mexican President Andrés Manuel López Obrador boasts a natural gas system whose capacity is higher than the country’s gas demand. 

Whether it’s through the pipes that the state owns and operates, or those in which state power utility Comisión Federal de Electricidad (CFE) and Sistrangas operator Cenagas hold the “primary” market capacity, state companies exercise strong control...