On the lookout for new business opportunities, about 100 Texas regulators and producers last month continued their courtship with Mexican energy officials. The first priority was to find ways for the state’s producers to expand their businesses into Mexico. However, as the state’s mature fields decline and natural gas needs continue to escalate, the Texas delegation also was working to line up a potential energy supplier for the future.

Leading the 100-member delegation was Texas Railroad Commissioner Charles Matthews, one of the speakers at a three-day event in late August that focused on Mexico’s energy sector. Among other things, said Matthews, Texas industry wanted to know what it could do to help the country grow its vast energy reserves.

“Our producers are looking for opportunities,” Matthews said. If the Texas-based producers obtain the same price in Mexico that they do in Chicago or New York, he said they would rather sell to southern markets because of the lower transportation costs. Currently, Texas provides about 30% of U.S. exports, with annual production of 5.7 Tcf. However, it competes with Canada, which now supplies about 18% of U.S. gas, Matthews said.

Meanwhile, Mexico’s thirst for natural gas has been growing, jumping from importing 300 MMcf/d in 2001 to more than 900 MMcf/d as of June 2003. However, as Mexico begins to grow its production levels from the current 4.5 Bcf/d to about 7 Bcf/d in the next few years, Matthews said it could begin exporting — and he wants Texas at the top of the list.

“No one knows when this will happen,” said Matthews, of the declining natural gas production in the state. But at some point in the future, perhaps as long as 10 years, “Texas is going to need natural gas from Mexico.”

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