Mexico’s natural gas market needs storage capacity and foresees steady growth in consumption over the coming years, according to the latest Consulta Pública, or public consultation, conducted by Sistrangas national pipeline grid operator Centro Nacional de Control del Gas Natural (Cenagas).


Cenagas engages each year with market participants to gauge their current and future gas needs to tailor infrastructure plans accordingly. The results allow Cenagas to annually update its five-year Sistrangas expansion plan.

Seventy-one firms participated in this year’s process, a 13% increase from 2020. Respondents included firms from the distribution and marketing, power generation, and industrial demand segments. Six firms participating were interested in providing storage services.

A total of 38 firms expressed interest in securing a combined 2.733 Bcf of storage capacity, with marketers accounting for 2.437 Bcf, or 89% of the total.

The distribution, industrial and power generation segments indicated a need for 86 MMcf, 133 MMcf and 77 MMcf of storage, respectively.

Mexico currently relies on linepack, i.e. gas stored within pipelines, and liquefied natural gas (LNG) to alleviate daily system balances.

Underground storage capacity would allow the market to respond to “diverse situations that put the Sistrangas balance at risk,” according to Cenagas. “In this sense, delineating a storage strategy, in conjunction with the energy ministry, that prioritizes the development and execution of infrastructure, is one of the principal challenges.”

System imbalances may be caused by shippers not fulfilling their injection or withdrawal commitments. They also are caused by supply interruptions such as those seen during Winter Storm Uri in February, as Mexico relies on imports to meet 70-80% of its gas needs. The figure exceeds 90% when excluding gas consumed by state oil company Petróleos Mexicanos (Pemex).

Given the impacts of the Texas freeze on Mexico, the latest Consulta focused on storage from both a demand and supply perspective, said Cenagas general director Abraham Alipi.

Although the market has long called for underground storage capacity, and various projects have been proposed, none have materialized

In the first version of its 2020-2024 five-year plan, Cenagas said it was planning an underground storage project at a salt dome near Coatzacoalcos in Veracruz state. The project is slated to enter service in 2022 or 2023, though progress is unclear.

Authorities also have shelved a public policy on gas storage published in 2018 by the previous regime that called for 45 Bcf of working gas in storage by 2026.

“I think the best timing for storage is now,” Gadex energy consultant Eduardo Prud’homme told NGI’s Mexico GPI. He noted the supply impacts from Uri are still fresh in people’s minds. He said multiple developers are working to develop storage projects in Mexico.

However, Prud’homme said, while its engagement with the market is encouraging, Cenagas has not explained its business model for developing storage capacity, how the capacity would be allocated, nor who the offtakers would be.

Even without storage capacity, market participants expect their gas consumption to rise significantly over the next 15 years. 

Combined natural gas demand of all respondents is currently 1.931 Bcf/d. Market participants said consumption could more than double to 3.991 Bcf/d by 2036, a 2.06 Bcf/d increase.

The industrial segment accounts for 68% of the projected incremental demand, followed by the electric power (18.9%) and residential and commercial (9.9%) segments.

Prud’homme cautioned that while the Consulta is a valuable tool, the data is a “very raw proxy of what’s going on” in the market.