Mexico reallocates natural gas pipeline capacity

by Talk Business & Politics staff ( 44 views 

The National Center for Natural Gas Control in Mexico recently reallocated the country’s natural gas pipeline capacity to foreign and domestic companies after two rounds of auctions, according to the U.S. Energy Information Administration. The center manages the country’s Integrated National Natural Gas Transportation and Storage System, which includes 6,256 miles of pipeline with a capacity of 6.3 billion cubic feet per day.

In 2014, the National Center for Natural Gas Control (CENAGAS) was created to reassign pipeline capacity previously owned by Mexico energy company Petroleos Mexico (PEMEX). “Before 2014, PEMEX was the monopoly owner of Mexico’s pipeline assets,” according to the EIA.

In the first auction in October, 4.1 billion cubic feet of pipeline capacity was assigned, including 1.1 billion cubic feet to the Federal Electricity Commission, 1.4 billion cubic feet to PEMEX and 1.6 billion cubic feet to independent power producers. Unlike the second auction, this auction wasn’t open to foreign companies.

In the second auction in May, the remaining 2.2 billion cubic feet of capacity was allocated. More than half of the capacity was awarded to PEMEX. ENGIE Mexico and ArcelorMittal each received 7%, the second largest shares of the capacity. Shell Trading Mexico and Grupo Alpha acquired 6% and 5%, respectively. “The remaining 15% went to 19 other companies,” according to the EIA. “Many of the companies that were awarded capacity rights are in the natural gas retailing and marketing business, although the list also includes industrial customers such as steel and cement companies.”

Mexico’s natural gas pipeline capacity is divided into zones, and the most sought after zone in the second auction was the Gulf zone, which is shares borders with the United States. The Kinder Morgan Texas Pipeline connection at Pesqueria and the Ramones injection points on the Net Mexico pipeline, which transports U.S. natural gas to Mexico, were two of the most sought after points of capacity.