Mexico’s national pipeline operator Centro Nacional de Control del Gas Natural (Cenagas) has opened a second bidding for natural gas supply to ensure the Sistrangas pipeline system maintains system balance.
Cenagas wants to guarantee “the balance and operation of the system to ensure the continuity of natural gas supply in the country,” it said. The operator was created in 2014 under the framework of the 2013 constitutional energy reform to promote market conditions to further the “principle of vertical disintegration, the ultimate goal of which is to guarantee continuity, quality, safety and efficiency in the provision of natural gas transport and storage services.”
The pipeline operator is calling on shippers to present proposals for supply, with the understanding that it would be used solely when the operational conditions on the Sistrangas require it.
Because of the coronavirus, Cenagas has requested that initial interest be sent via email. The bidding process is opening on Wednesday (July 22), and interested parties would receive a response 10 days after bids have been submitted.
Natural gas supply could begin the day after contract terms are finalized and continue through the end of the year with the possibility of extensions. Information on the process, including relevant injection points and contract details, in Spanish, may be found here.
Interested companies are asked to provide proof of all relevant permits, including upstream capacity; the injection points at which supply will be received; available minimum and maximum amounts of supply; the price index to be used for valuation of proposal; and the dates during which the supply offer applies.
In the first bidding process launched last December, Cenagas received 11 bids for gas supply, eight of which complied with the objectives set out in the tender process.
Mexico had previously achieved system balancing on its national network through purchasing costly liquefied natural gas.
The new bidding process comes on the heels of Cenagas’ annual public consultation with natural gas users in Mexico. Because of the coronavirus pandemic, the consultation was held virtually this year and results are set to be published on Aug. 28.
Cenagas plans to use the results to help define gas demand in the country and projects that may need to be developed.
As part of the consultation, Cenagas presented its strategy for the near term of the Mexican gas market, including contracting gas to improve the balance of the system, which it said has so far reduced the cost of other balancing measures on the pipeline system.
Other goals of Cenagas include issuing a five-year plan; gradually integrating unused capacity of independent pipelines to Sistrangas; developing a hub at Las Adelitas in conjunction with Enbridge Inc. and Infraestructura Energética Nova (IEnova); developing a pipeline that would cross the Isthmus of Tehuantepec; ramping operations at the reconfigured Cempoala compression station; and with ArcelorMittal SA, installing a compression station in Pátzcuaro, in the province of Michoacán.
Cenagas officials also said they would help support the creation of an electronic secondary market and are in favor of new open seasons.
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