A perfect storm emerges as natural gas markets are rocked by surging post-pandemic demand, constrained production growth, and Russia’s invasion of Ukraine. Perhaps not since the 1970s has the world faced an energy crisis of this magnitude.
In Mexico, the repercussions of a global energy
squeeze are being felt in myriad ways. Higher oil
and gas prices are leading to a degree of renewed
activity in the upstream sector, both among private
sector players and state oil and gas firm Pemex.
Additionally, offtaker interest for as many as four
liquefied natural gas (LNG) projects on the country’s
Pacific Coast is surging.
"The Perfect Storm" Special Edition assesses the state of
Mexico’s natural gas market in what will be surely
remembered as a transformational time and paints a picture of what to expect
in the months and years to come.
The Special Edition Includes...
- Assessment of the state of Mexico’s natural gas market
- A look at recent conflicts that created market opportunity for Mexico LNG Projects
- How the repercussions of a global energy squeeze are affecting Mexico
- The amount of natural gas flowing into Mexico and from what sources
- How Latin America's upstream oil and gas segment is performing comparing to 2021
- Mexico's CFE strategy for developing natural gas pipelines for Mexico's Baja California
- Demand expectations for North America despite Russia's invasion of Ukraine
REPORT HIGHLIGHTS
The value of cross-border energy
trade between the United States and Mexico
reached a nine-year high of $42 billion in
2021, according to the U.S. Energy Information Administration (EIA).
The management teams of Halliburton Co., Baker Hughes
Co. and Schlumberger Ltd. each reported strong year/year growth
in the region during their respective first quarter earnings calls, and
indicated they expect the trend to continue.
Sempra’s 3.25 million metric tons/year
(mmty) ECA liquefied natural gas (LNG) Phase 1 terminal is expected online in 2024. A second-phase 12 mmty train
could also be developed at the site.
Mexico’s pipeline gas imports from the United States rose
by close to 12% year/year during the first eight months of 2021
despite a 6% y/y drop in February associated with Winter Storm
Uri, researchers said.
“There’s going to be growing energy integration between the
two countries,” Lloyd said. “It’s going to be good for the economy
of both countries and it’s also going to be good for decarbonization.”
By the end of 2022, U.S. LNG export capacity should reach about
14 Bcf/d, from about 13 Bcf/d now. Most spot shipments will find
their way to Europe.
“An open and modern country like ours requires a clear, transparent and reliable legal framework, as well as the application of
technical criteria in the operation of the energy sector,” said CCE.
If the U.S. increases gas exports to Europe as a result of Russia’s invasion of Ukraine, “Mexico could face high gas prices and
shortages,” said Velia Valdes, an associate director in Latin America
Corporates. She spoke during a webinar Fitch organized on the
Mexican energy sector.
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