TC Energia and IEnova's 2.6 Bcf/d Sur de Texas-Tuxpan pipeline to add capacity for US natural gas exports to Mexico has been completed after significant delays in 2018.
"The gas pipeline represents a key piece for the energy security of the country given that it can supply the center and south of Mexico via its interconnections," said Robert Jones, president of TC Energia — the Mexican unit of TC Energy, formerly TransCanada.
But a number of delayed pipelines have yet to come online for Mexico's central region to access more gas, including TC's Tuxpan-Tula and Tula Villa de Reyes. And a reconfiguration of the Cempoala compression station in Veracruz state lacks completion needed for gas to flow to the gas-starved south-southeast region.
The TC-operated Sur de Texas-Tuxpan line will deliver gas to the inland Mexican pipeline network Sistrangas in Altamira in Tamaulipas state — also the site of one of Mexico's two LNG terminals — and Tuxpan in Veracruz state. It would then be routed south toward south-southeast markets once the Cempoala compression station is ready. Pipeline operators did not immediately confirm when the pipeline would begin normal operations.
Mexico's south and southeast have been suffering from a natural gas supply deficit following a decade of declining domestic production and industrial growth.
The south-southeast region is today one of the two largest gas consuming hubs together with the industrialized, pipeline infrastructure-abundant northeast region at 2.5 Bcf/d. According to the latest data from energy ministry Sener, demand in the south-southeast is powered namely by the oil industry, which takes some 1.7 Bcf/d — the industrial and power sectors consume nearly 1 Bcf/d.
But last year, the worst gas shortages hit the southeast's Yucatan peninsula, where demand reaches some 900mn cf/d of which 100mn cf/d of demand is from the non-energy industrial sector, followed by the power sector at some 85mn cf/d. The oil and gas industry uses some 620mn cf/d for gas injection to onshore and offshore wells and for gas-processing facilities.
Additional supply to the pipeline-scarce southeast will remain hampered until the new Texas-Tuxpan system reaches its maximum flow capacity and is connected to the only gas line into the Yucatan peninsula — the Engie-operated 250mn cf/d Mayakan pipeline.
Although Engie recently announced a $70mn expansion project to its Mayakan system in the Yucatan peninsula to increase Mayakan's transport capacity to 350mn cf/d by 2020 and 550mn cf/d by 2022, all deliveries to the southeast via Mayakan come from state oil company Pemex's domestic production.
Pemex produced 4.82 Bcf/d of natural gas in April, up from a record low of 4.64 Bcf/d in the same month of 2018 but down from 4.86 Bcf/d in March. Of April's output, 958mn cf/d was non-associated gas, 3.86 Bcf/d was associated gas and nitrogen accounted for the remaining 1.11 Bcf/d.
In addition, Pemex gas processing at the Cactus and Nuevo Pemex stations, which are essential to deliver to the south-southeast region via the Mayakan pipeline, have decreased sharply.
US midstream operator Enbridge's 2.6 Bcf/d Valley Crossing Pipeline issued non-critical notices informing that the line is ready to deliver volumes to the TransCanada-operated Sur de Texas-Tuxpan as of today, according to the company's electronic bulletin board. Nominations for the Valley Crossing Pipeline are open through 30 June, the company said.
The Valley Crossing and Sur de Texas-Tuxpan is now the largest cross-border gas pipeline system by volume, followed by the 2.1 Bcf/d NET Mexico line, which serves Pemex's Los Ramones line in Mexico. Enbridge is now the second-largest US gas exporting company via cross-border pipelines to Mexico after Kinder Morgan, which has the largest capacity via several lines and exports over 3 Bcf/d.
Total demand in Mexico reached 8 Bcf/d and imports peaked as high as 6 Bcf/d in 2018.
