According to company plans and Mexican government announcements, the vast majority of 2021 natural gas projects will be spearheaded by the state, or at least the state will play some role in their development.

Mexico infra plan

Meanwhile, most of the major natural gas pipelines launched thanks to Mexico’s 2013-2014 energy reform are complete, but a few delayed projects should come online in 2021.

One of these is Grupo Carso’s 472 MMcf/d Samalayuca-Sásabe pipeline. The pipeline is in the testing phase and slated to enter service in the coming weeks. It will connect West Texas gas supply with the Sásabe area of northwestern Mexico.

Setbacks on Sempra Energy’s Guaymas-El Oro line will hold up some of this capacity, however. Company officials said recently talks with the government and the Yaqui indigenous community are progressing well, though there is no timetable yet for its in-service.

TC Energy Corp.’s Tuxpan-Tula and Tula-Villa de Reyes pipelines also face delays due to local opposition, preventing the full utilization of capacity on the 2.6 Bcf/d Sur de Texas-Tuxpan subsea pipeline.

The company expects the phased entrance into service of the 886 MMcf/d Tula-Villa de Reyes pipeline in Mexico in 2021.

Despite ample cross-border infrastructure, midstream company Kinder Morgan Inc. executives said recently they had received “significant” customer commitments through a recent open season and were moving forward with the Mier-Monterrey Pipeline system expansion project serving Mexico.

The $22 million project, expected to be in service in 3Q2021, involves expanding the system’s existing capacity by 35 MMcf/d and is supported by long-term take-or-pay contracts.

Meanwhile, the open season to test support for the Mayakan natural gas pipeline system launched by French company Engie SA could be a sign the French company aims to “detect firm-based demand from third parties for the expansion of operating assets,” said Genscape Inc. analyst Ricardo Falcon.

The trunkline stretches from its interconnection to the national pipeline Sistrangas in Reforma, Chiapas, via the newly completed 250 MMcf/d Cuxtal I interconnect, to Valladolid, in the upper Yucatán Peninsula. Cuxtal has room to expand to 500 MMcf/d.

The Comisión Federal de Electricidad (CFE) is an anchor client on the system. The state utility announced plans for the 521 MW Mérida and 752 MW Riviera Maya plants in July.

Public Sector Rising

Mexico’s second infrastructure plan announcement in December had a $6 billion energy focus that was completely dominated by natural gas. These projects are slated to begin works in 2021.

The Finance Ministry included in the list six combined-cycle plants. The Baja California Sur, Tuxpan, González Ortega, Mérida, San Luis Río Colorado and Valladolid projects are worth a total of 59 billion pesos ($2.95 billion) in investment. 

The highest-value project included in the list is the Energía Costa Azul (ECA) liquefied natural gas (LNG) joint venture being developed by Sempra Energy subsidiaries Sempra LNG and Infraestructura Energética Nova (IEnova). 

ECA, the first LNG export project in Mexico to be sanctioned, is expected to begin work in January with total investment of 47 billion pesos, or around $2.4 billion, according to the Finance Ministry.

The project would source U.S. gas, and is expected to have an advantage over U.S. Gulf Coast LNG facilities because vessels do not have to traverse the Panama Canal. ECA includes a $400 million pipeline in Mexico. The plant would be built adjacent to the company’s existing ECA LNG receipt terminal near Ensenada.

In the first packet of infrastructure projects announced in early October, Mexico’s government included an additional LNG export project. 

The Salina Cruz natural gas liquefaction project would require 25 billion pesos ($1.2 billion)  in investment and be spearheaded by CFE and La Administración Portuaria Integral (API).

Mexico’s Pacific Coast could see a total of three projects being developed in the coming years as Asian markets increase their appetite for imports of cheap and reliable U.S. gas via the shortest transport route possible.

Mexico Pacific Ltd. LLC’s CEO Doug Shanda thinks his company’s LNG export project in Puerto Libertad, Sonora State, could be sanctioned by the end of 2021, with first gas shipped in 2025, “right when the supply gap is forecasted to open up.”

Meanwhile, Energy ministry Sener on Nov. 5 published the official 2020-2024 Sistrangas pipeline expansion plan, which it developed with system operator Centro Nacional de Control del Gas Natural (Cenagas).

The plan outlines eight natural gas infrastructure projects to be developed over the five-year span, requiring combined investment of $1.2 billion-$1.4 billion.

The 1 Bcf/d Leona Vicario hub would serve the southeastern states of Tabasco, Campeche, Yucatán and Quintana Roo, and take an estimated two to three years to develop. The $18.5 million project is meant to provide gas supply optionality for the Yucatán region amid declining gas production by state oil company Petróleos Mexicanos (Pemex). It also would eventually supply gas to the Dos Bocas oil refinery under construction in Tabasco.

The 196 MMcf/d Francisco I Madero hub would serve the northern states of Coahuila and Durango, requiring investment of $37.8 million and taking one year to develop. The first phase of the project would give the Sistrangas a new injection point from the Permian Basin in West Texas through an interconnection with Fermaca’s Waha-to-Guadalajara system. The second phase entails modification of the Chávez compressor station, allowing 96 MMcf/d of new supply to reach Durango and Coahuila.

The Dulces Nombres project in Nuevo León state is estimated to take one to two years to develop and require $17.2 million, according to Sener. The project entails the installation of new metering equipment that would allow Sistrangas to receive an additional 200 MMcf/d via its interconnection with Kinder Morgan Inc.’s Mier-Monterrey pipeline system.

The Montegrande expansion project would take under a year to develop and require $37 million of investment, allowing the Sistrangas to receive an additional 1 Bcf/d at the Montegrande interconnection point in Veracruz state, where the Sur de Texas-Tuxpan pipeline connects with the Sistrangas.

The Tecolutla and Lerdo compressor stations are to have a combined capacity of 1.6 Bcf/d, serving the central and southern regions of Mexico and requiring $71 million.

The 320 MMcf/d Jáltipan-Salina Cruz pipeline, meanwhile, would span the Tehuantepec isthmus, allowing more gas to reach Salina Cruz on the Pacific Coast, where the government aims to develop a liquefied natural gas (LNG) export terminal.

The 60 MMcf/d Prosperidad pipeline also would serve Oaxaca and Chiapas states, and calls for investment of $261.2 million.

Finally, the 6 Bcf of underground storage capacity in salt caverns to serve the central and southern zones of the country are projected to take two years to develop and require investment of $318 million to $481 million, Sener said.

Andrew Baker contributed reporting to this story