French pipeline operator Engie plans to inject biomethane into its existing natural gas network as part of a program, the first of its kind in Mexico, to decarbonize its operations by 2045.
"The use of biomethane blending has potential in Mexico as converting agricultural and cattle waste could allow us to substitute up to 10pc of current natural gas demand," Ana Laura Ludlow, sustainability director, told Argus.
Some 66pc of Mexican natural gas demand of around 10.7 Bcf/d is covered by US pipeline gas imports within 25 gas lines sponsored by state power utility CFE during the previous presidential administration as well as the 10,068km (6,255-mile) state-operated Cenagas system.
But Engie hopes to blend biomethane with natural gas and inject it into its existing pipeline and distribution network, allowing industry, the power sector and residential customers to gradually decarbonize their energy matrix.
Biomethane blending could be a precursor to more expensive green hydrogen blending and would not require any pipeline modifications if biomethane levels were kept to around 18pc, Ludlow said.
Use of biomethane in Mexico would carry a "cost premium," particularly given the proximity to abundant and economic supplies of US pipeline gas, with prices estimated at $8-10/mmBtu compared with natural gas at $2-3/mmBtu, Ludlow said.
The company expects to conclude all regulatory and permit requirements by the end of this year to launch its pilot projects in Queretaro, Campeche, Jalisco, Puebla and Tlaxcala states next year.
"The state governments have been really open to promoting these projects and I'm sure they will lay the groundwork for developing the biomethane sector in Mexico," Ludlow said.
Engie began injecting biomethane, which has similar chemical properties to natural gas, across 45 points in its pipeline system in France in 2017 and closed out last year with 500 injection points.
While the Mexican government has no specific biomethane policy, green hydrogen development is part of its strategy to reduce the dependence on US pipeline gas and to comply with lower greenhouse gas emissions announced during the Cop 27 climate talks in November. But Mexico has yet to build facilities and pilot projects recently announced by state power utility CFE.

