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Mexico Auctions First Gas Pipeline Capacity

Pipeline

Mexico’s National Center for Natural Gas Control (CENAGAS) conducted its first open season for capacity rights to its natural gas pipeline grid. The auction took place in May 2017. In “Round 0”, which took place in October 2016, CENAGAS allocated approximately 4.1 Bcf per day of capacity to PEMEX, Mexico’s Federal Electricity Commission, and a number of independent power producers.

Source: EIA

The recent “Round 1”—technically the second round—allocated the grid’s remaining 2.2 Bcf per day to PEMEX, ENGIE Mexico, ArcelorMittal, Shell Trading Mexico, Grupo Alpha, and some other smaller companies.

The recent allocations come as part of an ongoing energy reform policy in Mexico. The energy reform has been ongoing since 2014. Prior to 2014, Mexico’s national petroleum company PEMEX had a monopoly on the country’s pipeline infrastructure.

The first round of allocations—Round 0—was not open to international companies. Within the second round, international companies requested 3.6 Bcf per day in capacity rights—1.4 Bcf per day higher than the remaining capacity available. Of the remaining 2.2 Bcf per day not restricted to Mexican companies, PEMEX was awarded 1.3 Bcf per day.

Much of the interest in the pipeline second round of allocations was focused in the Gulf-regions, where pipelines cross the U.S.-Mexico border. Companies that won bids to operate pipelines began taking over from the previous operators on July 1, with a one-year operation contract.

(Click to enlarge)

Source: EIA

CENAGAS held an auction for capacity on five cross-border pipelines that were reserved for the Federal Electricity Commission on July 10, but no companies submitted bids. CENAGAS will hold another auction for the same five pipelines on August 10.

By Oil and Gas 360

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