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

Cenagas

Recently, officials at CFEnergía, the trading arm of Comisión Federal de Electricidad (CFE), announced plans to create a secondary market for natural gas transportation capacity in Mexico. Although this initiative will also include the resale of the molecule with delivery in the United States, it is the opening up of capacity in CFE-anchored gas pipelines south of the border that is most relevant for the participants in the gas industry in Mexico.

In general terms, a secondary market is a pipeline transportation capacity allocation mechanism that, if competitive,...