Mexico's state-owned pipeline operator Cenagas is planning a major reorganization of natural gas transport contracts within the state-owned pipeline system as state-owned utility CFE builds out new pipelines and state-oil company Pemex increases output.
"We want to maximize the use of the pipelines as we cannot leave them underutilized," Cenagas director, Abraham Alipi, told Argus. "Transport capacity is being gradually released and there is a program of open seasons that will start in September."
Gas transport capacity within the 10,068km (6,255-mile) state-owned pipeline network was opened to the private sector for the first time in 2017 when Cenagas held an open season for capacity freed by Pemex and CFE under Mexico's 2014 energy overhaul.
But conditions have changed since 40pc of the 6.2 Bcf/d transport capacity was originally assigned to CFE and Pemex. Large amounts of transport capacity now sit underutilized, despite rules requiring Cenagas to offer spare capacity as it becomes available.
Pemex's transport capacity was not fully exploited from the start, as dwindling natural gas production in southeast Mexico meant it could not meet its supply commitments.
Pemex has launched output in the onshore Quesqui, Ixachi and Tupilco Profundo fields since 2019, increasing non-associated gas production by 66pc to 1.93 Bcf/d in May year over year. As a result, gas flows in southeast Mexico have significantly altered over the last year.
"Given Pemex's increase in production, the company is reconfiguring its transport contracts within the Cenagas system and so we will be able to offer 370mn cf/d in a southeast open season in September," Alipi said.
As production has risen, Pemex has cut natural gas imports, down to 389mn cf/d in May, from 711mn cf/d in the same month of 2022, according to Pemex data.
CFE's gas transport capacity has also changed since 2014 and a second open season for capacity freed up by the utility in northern Mexico is scheduled in the first half of next year, Alipi said.
During the previous administration, CFE stepped in to compensate for Pemex's declining output with the sponsorship of 25 new pipelines that draw gas from the US to Mexico. As the buildout has concluded, CFE has migrated a lot of its gas supply to the pipelines it sponsored, leaving large amounts of transport capacity in the state-operated network unused.
New, CFE-backed pipeline capacity — as part of President Andres Manuel Lopez Obrador's pledge to drive economic development in southeast Mexico — will also free up further capacity in the Cenagas system when it comes online from 2025.
Under the southeast gas strategy, Cenagas will shut the tie-in that supplies gas to French Engie's 250mn cf/d Mayakan line. Supply will be replaced with flows from Canada-based TC Energy's 1.3 Bcf/d Southeast Gateway pipeline and the 500mn cf/d Mayakan extension Cuxtal II. Neither of the new pipelines will be connected to Cenagas.
Cenagas pipeline capacity in the southeast will instead be redirected to supply Pemex's 340,000 b/d Olmeca refinery in Tabasco and 10 new industrial parks being built in Veracruz and Oaxaca as part of the Interoceanic Corridor project.
Cenagas has abandoned plans to build a new cross-country pipeline between Jaltipan, Veracruz and Salina Cruz, Oaxaca and is instead reconfiguring an existing gas pipeline — currently reserved for the Salina Cruz refinery — to supply 20mn cf/d to the new industrial parks, with the remainder to serve the Olmeca and Salina Cruz refineries, Alipi said.
Capacity on the 26mn cf/d gas pipeline will be increased to 90mn cf/d with the addition of three new compression stations in Jaltipan, Donaji and Medias Aguas and will be supplied with Pemex production from the Cactus processing plant near the onshore Quesqui field.
