NGI Mexico GPI

Natural gas production at Mexico’s state-owned oil and gas giant Petróleos Mexicanos (Pemex) fell 8.9% year/year in January to 3.696 Bcf/d.

Editor’s Note: NGI’s Mexico Gas Price Index, a leader tracking Mexico natural gas market reform, is offering the following question-and-answer column as the first in a regular interview series with experts in the Mexican natural gas market.

An intense late-season polar cold blast inspired huge natural gas spot price increases on Friday, including a record-setting spike in the Pacific Northwest. Despite the fireworks for cash prices, the prospect for warmer temperatures later this month limited buying interest in the futures market.

Editor’s Note: Please enjoy this bonus coverage from NGI’s Mexico Gas Price Index, which includes daily prices, analysis and coverage of the emerging natural gas market in Mexico.Request a Trial | Subscribe

Mexico’s central bank (Banxico) has downwardly revised its 2019 and 2020 economic growth forecasts for the country, citing both external factors and uncertainty over the government’s policies at home, as well as concern over the outlook for national oil company Petróleos Mexicanos (Pemex).

Natural gas futures continued to trade mostly sideways Thursday as much of the expected cold that was forecast to arrive this weekend has likely already been priced into the market. Meanwhile, a reported storage withdrawal that came in on the lower end of estimates sapped early gains, and the Nymex April gas futures contract went on to settle at $2.812, up just 1.3 cents. The balance of summer (May-October) also rose less than 2 cents to average $2.89.

Editor’s Note: Please enjoy this bonus coverage from NGI’s Mexico Gas Price Index, which includes daily prices, analysis and coverage of the emerging natural gas market in Mexico. Request a Trial | SubscribeInfraestructura Energética Nova (IEnova) chairman Carlos Ruiz Sacristan and Comisión Federal de Electricidad (CFE) CEO Manuel Bartlett have agreed to jointly work toward re-opening a section of IEnova’s Sonora natural gas pipeline in Western Mexico that has been inactive since August 2017, Ruiz Sacristan said last week.CFE is Mexico’s state-owned power utility and the anchor customer of the Sonora pipeline, which includes the 503-kilometer (313-mile) Sásabe-Guaymas and 328-kilometer (204-mile) Guaymas-El Oro segments.The Guaymas-El Oro segment remains shut amid a still-unresolved legal dispute with one of the area’s eight Yaqui indigenous communities. The other seven gave their blessing to the pipeline, which entered operation in 2017, but was subsequently sabotaged that same year by the dissenting Yaqui faction. IEnova is the Mexican unit of U.S.-based Sempra Energy.During IEnova’s fourth quarter earnings call last Thursday, Ruiz Sacristan told analysts that he and Bartlett had a “very cordial discussion about [Guaymas-El Oro]. We agreed with CFE that our priority is to work together to place this pipeline back into service.”Bartlett and Mexican President Andrés Manuel López Obrador called earlier this month for the renegotiation of several of CFE’s natural gas pipeline contracts, citing “unfair” take-or-pay clauses that force CFE to make fixed capacity payments to developers for delayed or inactive pipelines such as Guaymas-El Oro.To read the full article and gain access to more in-depth coverage including natural gas price and flow data surrounding the rapidly evolving Mexico energy markets, check out NGI’s Mexico Gas Price Index.

The new management team at Mexico’s state-run Petróleos Mexicanos (Pemex), in its first conference call with investors on Wednesday, discussed the same issues its predecessors frequently faced: huge financial losses, an even larger debt and upstream results that were somewhat less than scintillating.Pemex reported that it was able to reduce its net fourth quarter losses by 58% year/year, to 125.5 billion pesos, or about $6.4 billion. Cash flow rose by 2% to hit 94.9 billion pesos in 4Q2018 compared to 93 billion pesos in the comparable quarter in 2017.

Wednesday was another choppy day for natural gas futures, as traders didn’t quite know what to make of the latest weather outlooks for early March and what may be another supportive storage Energy Information Administration (EIA) storage report.