Mexico's LNG receipts more than halved in July compared with a year earlier, despite a fall in pipeline gas deliveries from the US.
Mexico imported 203,500t of LNG in July, down from 507,700t a year earlier and 260,300t in June, data from oil analytics firm Vortexa show. But receipts in July were higher than the average of 171,400 t/month in January-June, which was down from 425,100 t/month in the same period last year.
Lower pipeline deliveries from the US failed to boost LNG receipts in July. Mexican pipeline imports from the US through the country's Sistransgas network — which handles most US pipeline imports — slipped to 3.1bn ft³/d (87.7mn m³/d) last month from 3.28bn ft³/d (92.8mn m³/d) a year earlier, but were up from 2.9bn ft³/d (82mn m³/d) in June, Cenagas data show.
Weaker gas demand owing to the Covid-19 pandemic may have reduced the need for brisk LNG imports. Demand on the Sistrangas network fell to 4.5bn ft³/d (127mn m³/d) in July from 5.1bn ft³/d (144mn m³/d) a year earlier, although it was up from 4.29bn ft³/d (121mn m³/d) in June.
Mexico entered its final phase of lifting virus-related restrictions on industry and movement in June, but has since struggled to contain the coronavirus. The country's traffic light warning system shows that for 17-30 August, 31 out of the country's 32 states remain either on a high or maximum health alert, which could curb demand recovery and the need for LNG and US pipeline gas imports.
The start-up of the final leg of the 5bn ft³/d (141.5mn m³/d) Wahalajara pipeline system will boost US pipeline exports to Mexico, but the launch could be slowed by the virus, the US EIA said. Construction of the 886mn ft³/d (25mn m³/d) Villa de Reyes-Aguascalientes-Guadalajara leg was completed on 31 March but has not begun flows because of ongoing arbitration, Mexican state-owned utility CFE told Argus.
Once the final leg of the pipeline system is completed, LNG deliveries to Mexico's 3.8mn t/yr Manzanillo import facility are expected to be restricted to providing periodic back-up supply. The first two legs — El Encino-La Laguna and La Laguna-Aguascalientes — started up in December.
