Natural gas prices in Mexico averaged $2.33/MMBtu in June, versus $2.78/MMBtu in June 2019, according to the latest IPGN monthly natural gas price index published by the Comisión Reguladora de Energía (CRE).

Marketers transacted 5.88 Bcf/d of the molecule, compared to 7.37 Bcf/d in the year-ago month, CRE data show.

CRE used 255 transactions from 24 companies to calculate this month’s index, versus 238 deals from 21 companies a year ago.

The IPGN compiles day-ahead spot sales reported to CRE by marketers.

CRE started publishing the index in July 2017 under the framework of Mexico’s 2013-2014 energy reform, which liberalized the formerly state-dominated natural gas market.

The latest data comes amid surging pipeline gas imports from the United States, which averaged an all-time high 6.4 Bcf/d for the July 20-24 period, according to Genscape Inc.

Due to Mexico’s dependence on U.S. imports, a majority of gas transactions in Mexico are linked to U.S. pricing locations such as Henry Hub, Waha and Houston Ship Channel.

Following the recent completion of Fermaca’s Waha-to-Guadalajara pipeline, gas flows from West Texas to Mexico could average as much as 1.5 Bcf/d throughout the second half of 2020 and full-year 2021, about double the current amount, according to a recent analysis by Rystad Energy.

National oil company Petróleos Mexicanos (Pemex) has struggled to meet Mexico’s gas supply needs over the last decade or so, leading state power company Comisión Federal de Electricidad (CFE) to tender a massive buildout of import pipeline capacity by the private sector, including the Fermaca system and the 2.6 Bcf/d Sur de Texas-Tuxpan subsea pipeline, a joint-venture between TC Energy Corp. and Infraestructura Energética Nova, aka IEnova.

Sur de Texas-Tuxpan entered commercial service in late 2019, but delays facing TC Energy’s Tuxpan-Tula and Tula-Villa de Reyes pipelines farther downstream have prevented the marine pipeline from operating at full capacity.

Mexico’s natural gas production averaged 3.58 Bcf/d in June, down from 3.76 Bcf/d a year ago, according to data from upstream oil and gas regulator Comisión Nacional de Hidrocarburos (CNH).

Output from projects operated by Pemex totaled 3.35 Bcf/d, down from 3.56 Bcf/d.

Production from private sector-operated projects, meanwhile, rose to 231.1 Bcf/d from 191.8 Bcf/d, a 20.5% year/year increase.

Former CNH chairman Juan Carlos Zepeda told NGI’s Mexico GPI in July that the newly improved outlook for 2021 natural gas pricing has made the development of Mexico’s sizeable non-associated gas reserves a more attractive proposition.

Nonetheless, local paper El Universal reported Monday that Pemex is reducing activity in the Burgo Basin, Mexico’s most prolific source of non-associated gas, due to budget constraints.

In related news, CNH published on Monday an agreement to suspend the deadlines associated with approved exploration, appraisal and development plans for operators in response to the Covid-19 pandemic.

CNH said it had received multiple requests from operators to suspend exploration and production activity, citing the pandemic and subsequent economic slowdown as grounds to declare force majeure.