Natural gas exports via pipeline from the United States to Mexico recorded a new monthly record in June, the U.S. Energy Information Administration (EIA) said in a note Friday, citing data from Wood Mackenzie.
Pipeline exports averaged 6.8 Bcf/d for the month, up 25% from June 2020 and 44% from the previous five-year (2016-2020) monthly average, said EIA’s Max Ober and Katie Dyl, the note’s principal contributors.
“New pipeline additions that went into service during 2020 and in the first half of 2021 increased the volume of natural gas flowing to natural gas-fired power plants, industrial plants and pipeline interconnections throughout Mexico,” they said.
Growth was driven by the 2.6 Bcf/d Sur de Texas-Tuxpan (STT) subsea pipeline and the 1.4 Bcf/d Trans-Pecos pipeline, the EIA team said.
Flows on STT averaged an estimated 1.7 Bcf/d for June, up from 0.8 Bcf/d in the same month a year ago.
The pipeline receives gas from the Agua Dulce hub in South Texas, and spans from Brownsville, TX, to the port city of Tuxpan in Mexico’s Veracruz state.
“The pipeline’s volume increased because of expanded infrastructure in Mexico, which has allowed more natural gas to flow to power plants in the Mexico City region and to Mérida markets in the Yucatán Peninsula,” the EIA team said.
Gadex consultancy founder Eduardo Prud’homme has said Agua Dulce is “easily the largest natural gas supply area for Mexico and home to the most impressive infrastructure dedicated to Mexico.”
The Trans-Pecos pipeline, meanwhile, connects to the Waha hub in West Texas, allowing Permian Basin gas to flow to Fermaca’s recently completed Waha-to-Guadalajara, aka Wahalajara system within Mexico.
Trans-Pecos flows to Wahalajara quadrupled year/year to 0.8 Bcf/d in June, researchers said.
Robust Mexico demand, liquefied natural gas (LNG) demand, and capital discipline by U.S. producers all have contributed to a surge in U.S. natural gas prices.
Henry Hub natural gas for August delivery was trading at $4.052/MMBtu on Monday morning.
“Because of increased access to natural gas imports, Mexico has increased its use of natural gas to generate electricity,” the EIA authors said, noting that power burns in Mexico totaled about 4.9 Bcf/d in June, up 19% y/y.
High temperatures in parts of northern and central Mexico also helped drive the increase in power sector gas demand, researchers said.
Industrial demand, meanwhile, rose 31% y/y to 3.3 Bcf/d for the month, “largely driven by the return to pre-pandemic demand levels and the reversal of related economic effects.”
Pipeline imports accounted for 76% of Mexico’s total natural gas supply in June, up from 40% in June 2015, researchers said, noting that Mexico’s domestic gas output and LNG imports have fallen while its pipeline network has expanded.
“We expect these record-high flows, which were driven by increased power demand, high temperatures, and greater industrial demand in June, to continue through the summer,” Ober and Dyl said.
Speaking last week at the LDC Gas Forums Northeast conference in Boston, IHS Markit’s Jack Weixel, senior director, said that U.S. pipeline gas exports to Mexico were up 1.3 Bcf/d summer-to-date in 2021 versus the same period last year.
The International Energy Agency also said this month it expects pipeline gas exports to Mexico to grow by about 10% over the 2020-2024 period.
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