Pemex to import natural gas from Eagle Ford shale field
The Mexican national oil company Petroleos Mexicanos (Pemex), through its international gas trading division MexGas International (MGI), is pursuing several pipelines projects to import natural gas from USA.
In Mexico as in other countries, the price of the natural gas is a key driver of the performances of the local industry.
With the prices depressing in the neighboring USA, Mexico had to do the same to preserve its economy.
But the actual gas market prices in USA issued from the massive shale gas exploration and production are far below Pemex costs.
In this context Pemex natural production is slightly declining from 7 billion cf/d in 2010, to 6.4 billion cf/d actually.
Pemex is not motivated to invest in what it considers as a non profitable business while the US Energy Information Administration (EIA) estimates Mexico among the top five countries by the largest shale gas deposit after China and USA.
In front of the stagnation of the production the demand is surging as in the emerging countries either to feed the power generation plants, either to provide the petrochemical industry with a competitive feedstock.
To compensate the lack of local production to meet the domestic demand, Pemex is investigating all the alternative sources of supply in beginning with the USA where the natural gas is cheap and abundant.
Los Ramones pipeline to link Texas to Central Mexico
Among the projected solutions, Pemex is working on a natural gas pipeline from the South Texas to Central Mexico.
Starting at the US/Mexican border in southern Texas, the pipeline would take 1000 kilometers length to deliver natural gas in central Mexico.
The first section should be originated from the Agua Dulce hub on the western Texas Gulf Coast to Reynosa in northern Mexico.
The second section should go south to Los Ramones.
As part of Mexico’s program to import up to 1 billion cubic feet per day from the USA, the previous Government was speeding up with Pemex the development of the project.
Pemex’s international gas trading company MGI was mandated to lead the bidding process for this Los Ramones pipeline project.
But after the Presidential election, Mexico is passing through the transition period until the new President-elect Enrique Pena Nieto should take the position on December 1st.
During this transition period, Pemex’s board did not want to proceed with the complex bidding process of this project and decided to postpone the decision until the President-elect is officially in charge.
In parallel to the Los Ramones pipeline project, Pemex is making good progress on the North-West Gas Pipeline project along the Pacific Coast to connect south Arizona in USA to the north of Mexico.
Estimated to cost also around $3 billion capital expenditure, the North-West Gas Pipeline should be constructed in four sections.
The first section has been awarded to Sempra for $570 million.
Pemex operates already more than 60,000 kilometers of pipelines in Mexico from which the Los Ramones pipeline project and the North-West Gas Pipeline should be just some extensions.
