Mexican

With or without proposed federal energy reforms, Mexico holds increased prospects and challenges for San Diego-based Sempra Energy, which is eyeing more pipeline work, expansion into natural gas liquids (NGL) and the hurdle of increased taxes by the Mexican federal government.

Mexico’s federal government-dominated energy sector continues to be the focus of reform talk by the country’s presidential administration, with disclosures by the new CEO at Petroleos Mexicanos (Pemex) that he will form a new company within the state-operated oil and natural gas giant specifically to go after shale and deep water Gulf of Mexico (GOM) supplies outside of Mexico.

Upcoming successes, particularly with major natural gas infrastructure projects, should help San Diego-based Sempra Energy offset a one-time 2Q2013 charge and annual revenue losses due to its minority share in a closed nuclear power plant in Southern California, CEO Debra Reed said Tuesday during a second quarter conference call with financial analysts in which she reported increased profits for the quarter and first half of 2013.

Japan’s Mitsui Corp. has been selected to construct a pipeline that would carry U.S. natural gas to Mexico from Tucson, AZ, Mexican President Enrique Pena Nieto announced in Japan while on a tour of Asian countries. The $460 million Tucson-Sasabe pipeline would have capacity of 770 MMcf/d and would join several other pipeline projects to move U.S. gas to Mexico (see Daily GPI, March 8). Mexico is seeking inexpensive U.S. shale gas to fuel power generation and supply industrial users. According to the U.S. Energy Information Administration, Mexico imported more U.S. gas than ever last year (see Daily GPI, March 14), and according to an analysis by Goldman Sachs, U.S. gas imports by Mexico will continue to increase (see Daily GPI, Feb. 11).

U.S. exports of natural gas to Mexico will grow as the country’s production fails to keep pace with demand and new pipelines on both sides of the border relieve transport constraints. However, Mexico eventually could come to rely on supply from its share of the Eagle Ford Shale, and U.S. gas could find higher prices overseas through liquefaction and export, Goldman Sachs said last Friday.

U.S. exports of natural gas to Mexico will grow as the country’s production fails to keep pace with demand and new pipelines on both sides of the border relieve transport constraints. However, Mexico eventually could come to rely on supply from its share of the Eagle Ford Shale, and U.S. gas could find higher prices overseas through liquefaction and export, Goldman Sachs said Friday.

The Mexican government said last Thursday’s explosion at the headquarters of state-owned petroleum company Petroleos Mexicanos (Pemex) in Mexico City was caused by a methane gas leak.

A glut of light oil supplies from tight oil fields into the Midwest has depressed regional prices, making it imperative for Canada’s oilsands producers to find alternative markets for their product, consultancy IHS CERA said in a Jan. 14 report.

TransCanada Corp. Mexican subsidiary Transportadora de Gas Natural del Noroeste, was awarded the contract to build, own and operate the El Oro-to-Mazatlan Pipeline (Mazatlan Pipeline) in Mexico by Mexico’s Comision Federal de Electricidad (CFE).