Mexican officials are working to add 10 new power generationprojects this year alone to guarantee the country has an adequatesupply of electric power through 2006. Energy Minister ErnestoMartens said that based on current capacity and ongoing projects,the country only has sufficient power to meet its growth demandthrough 2004.

Faced with an expected 6% annual growth in electricity demandover the next two years, Mexican officials predict at least $5billion a year needs to be invested into the state-controlledelectricity industry.

Along with its growing electricity demand, the country’s naturalgas distribution companies want to up the residential use ofnatural gas, and have announced plans to invest about $1 billioninto their infrastructure in the next five years, according toMexican Natural Gas Association President Marcelo Chauvet.

Chauvet said last week that the 21 natural gas distributionlicenses issued to private companies by the Comision Reguladora deEnergia (CRE) have only allowed for distribution coverage in thecountry’s three largest cities, which are Mexico City, Guadalajaraand Monterrey.

However, in April, CRE will issue new distribution licenses inthe Mexican states of Veracruz and Tabasco and in the cities ofMerida, Cancun and Cuernavaca. Chauvet said there are now about70,000 residential natural gas users in Mexico. By 2004,distributors hope to boost that number to 2.1 million.

CRE now is reviewing proposals from industry and state officialson how to establish a more efficient and competitive natural gasindustry. It accepted proposals through January 31, and expects toissue a report to update its institutional framework, which woulddefine Mexico’s objectives, goals, strategies and priorities forthe natural gas industry in the next decade.

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