mexico`s natural gas infrastructure

MEXICO’S NATURAL GAS
INFRASTRUCTURE
Texas to Mexico Natural Gas Exports Congress
Brandon Blaylock
Houston, TX., October 29, 2015
Industrial Organization of Natural Gas
Ministry of Energy
§ 
Issue permits for activities of
natural gas processing.
Energy Regulatory Commission
§ 
Issue permits for activities of:
o  Storage
o  Transport
o  Distribution
o  Liquefaction
National Center of Natural Gas
§ 
Public agency responsible for
managing, coordinating and
controlling the network of pipelines
and storage of natural gas in the
country.
o  Regasification
o  Compression
o  Decompression
o  First hand sales
o  Commercialization
Permit holders who provide transportation services and distribution through pipelines and storage of natural
gas to third parties, will have the obligation to provide open access, subject to the existence of available
capacity in their systems, upon payment of the fee authorized and subject to the conditions of service
provision established by the CRE.
With the reform, Pemex becomes a simple producer of natural gas (along with private industry).
Source: XXXXXX
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Mexico’s Midstream Natural Gas Scheme
Previous to the Reform
Pemex the
only producer
Pemex the only seller:
Pemex the
only importer
Private Electricity Generation
CFE
Distributors
Industry
Principal Problems:
Pemex manages the national
gas pipeline system.
There are no incentives to improve
transport infrastructure.
There is no effective open access.
§  Supply of molecule with transport (bundled).
§  No storage services.
§  Little chance to negotiate contract conditions.
§  Users do not own transport capacity they use.
Source: XXXXXX
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Mexico’s Midstream Natural Gas Scheme
Actual Scheme
Production
Private
Sector
Transport
Segregation
of duties
Comercialization
and Imports
Private
Sector
Independent manager of the
Transport Infrastructure by
CENAGAS:
§ 
Responsible for the operation (and maintenance) of
the national system of gas pipelines and storage.
§ 
Manage infrastructure and service contracts that
Pemex will transfer.
§ 
Provide access and reserve capacity for producers,
traders and consumers.
§ 
Make tenders for strategic gas pipelines.
Private
Sector
Final Users
Private
Sector
Actual Natural Gas System
5,634 mi
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Natural Gas Production and Imports
Natural Gas Production + Imports
mcfd
Production
8,000
Natural Gas Sales (without Pemex internal
consumption)
mcfd
Imports
Industrial
Distribution (domestic, small industry)
CFE
Private Generation
4,000
6,000
3,000
4,000
2,000
2,000
1,000
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Natural Gas Imports
mcfd
Baja California
Sonora
Chihuahua
0
2005
2006
2007
Baja
California:
2014 - 0%
Nuevo León
Tamaulipas
Colima
Sonora:
2014 - 3%
2008
2009
2010
2011
2012
2013
2014
Chihuahua:
2014 - 20%
1,357.8
1,289.7
Nuevo León:
2014 - 30%
1,089.3
Tamaulipas:
2014 - 39%
790.8
480.4 450.9
2005
2006
447.1 422.0
385.6
2007
2008
2009
535.8
2010
2011
Source: Mexico’s Energy Information System (SIE).
2012
2013
2014
Colima:
2014 - 8%
(LNG)
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New Gas Infrastructure:
Already built or in construction
Los Algodones
Tucson
Sásabe
Waha
San Isidro
Samalayuca
Pto. Libertad
Ojinaga
2,560 mi
El Encino
Guaymas
Agua Dulce
El Oro
Frontera
La Laguna
Topolobampo
Los
Ramones
Durango
Mazatlán
Zacatecas
Aguascalientes
V. Reyes
Naranjos
Tamazunchale
Guadalajara
Apaseo el
Alto
Tula
Tuxpan
Morelos
Lázaro Cárdenas
Jáltipan
Mayakán
Salina
Cruz
Source: Five year Plan, 2015-2019.
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New Gas Infrastructure:
New Pipelines to be Awarded (Five Year Plan)
Los Algodones
Tucson
Sásabe
Waha
San Isidro
Samalayuca
Pto. Libertad
Ojinaga
3,216 mi
El Encino
Guaymas
Colombia
Agua Dulce
El Oro
Frontera
La Laguna
Brownsville/ Matamoros
Los Ramones
Topolobampo
Escobedo
Durango
Mazatlán
Altamira
Zacatecas
Aguascalientes
V. Reyes
Naranjos
Tamazunchale
Guadalajara
Apaseo el
Alto
Tula
Tuxpan
Cempoala
Morelos
Lázaro Cárdenas
Jáltipan
Mayakán
Acapulco
Salina
Cruz
Tapachula
Source: Five year Plan, 2015-2019.
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Forecast of Natural Gas Imports
Forecast of Natural Gas Imports
mcfd
Los Algodones
Tucson
Sásabe
Waha
San Isidro
Samalayuca
Pto. Libertad
Ojinaga
6,000
5,800
El Encino
Guaymas
Colombia
Agua Dulce
5,600
El Oro
Frontera
Brownsville/ Matamoros
Los Ramones
La Laguna
Topolobampo
5,400
Escobedo
Durango
5,200
Mazatlán
Altamira
Zacatecas
5,000
Aguascalientes
V. Reyes
Naranjos
Tamazunchale
4,800
Guadalajara
Apaseo el
Alto
4,600
Tula
Tuxpan
Cempoala
Morelos
4,400
Lázaro Cárdenas
4,200
Jáltipan
Mayakán
Acapulco
Salina
Cruz
4,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Tapachula
§  The ability to import natural gas by pipeline from the United States is saturated right now.
§  Imports will increase as the construction of new interconnection pipelines are complete.
§  The Ministry of Energy predicts an import of over 5.5 bcfd for 2027.
Source: Ministry of Energy (2013).
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Investment Opportunities
The EXI Fund sees the next areas as investment opportunities in the Natural Gas
market in Mexico:
A.
New distribution zones for homes and businesses.
B.
“Last mile” pipelines for the industry sector.
C. “Sales and lease back” of pipelines in operation.
D. Underground storage.
E.
Opportunities provided by the new FIBRA E instrument (MLP).
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Contact:
Brandon Blaylock, bblaylock@exickd.com
Gerardo Colosio, gcolosio@exickd.com
www.mexicoinfra.com