• 2 minutes CV19: New York 21% infection rate + 40% Existing T-Cell immunity = 61% = Herd Immunity ?
  • 4 minutes Is The Three Gorges Dam on the Brink of Collapse?
  • 7 minutes Sources confirm Trump to sign two new Executive orders.
  • 27 mins Is the oil & gas industry on the way out?
  • 8 mins In a Nutshell...
  • 2 hours Better Days Are (Not) Coming: Fed Officials Suggest U.S. Recovery May Be Stalling
  • 2 days No More Love: Kanye West Breaks With Trump, Claims 2020 Run Is Not A Stunt
  • 3 days A Real Reality Check on "Green Hydrogen"
  • 8 hours Why Oil could hit $100
  • 2 days Where is Alberta, Canada headed?
  • 5 hours Australian renewables zone attracts 27 GW of solar, wind, battery proposals
  • 2 days Putin Paid Militants to Kill US Troops
  • 2 days The Coal Industry May Never Recover From The Pandemic
  • 2 days During March, April, May the states with the highest infections/deaths were NY, NJ, Ma. . . . . Today (June) the three have the best numbers. How ? Herd immunity ?
  • 3 days Why Wind is pitiful for most regions on earth
Russia Eyes Another Massive Gas Pipeline To China

Russia Eyes Another Massive Gas Pipeline To China

Russia and China see further…

Suppliers Fight For Dominance In This Crucial Gas Market

Suppliers Fight For Dominance In This Crucial Gas Market

The East Mediterranean region is…

U.S. LNG Industry Needs Prices To Double

U.S. LNG Industry Needs Prices To Double

Large U.S. LNG projects are…

Genscape

Genscape

With the world’s largest network of patented and proprietary monitoring technologies, Genscape delivers unique, real-time fundamental data to provide market insight and intelligence. Visit Genscape.com…

More Info

Premium Content

Mexican Pipeline Delays To Impact U.S. Gas Flows

On October 3, 2018, we received confirmation that the in-service date for two new Mexican pipelines is delayed. These delays change our forecast for Mexican supply, leading to higher-than-expected LNG imports and lower-than-forecast U.S. pipeline exports to Mexico. In particular, the delay will have a pronounced impact on Permian outflows, postponing an anticipated 0.8 Bcf/d increase by three months, delaying much needed relief to the basin.

Yesterday evening, we received confirmation from Fermaca that the two southern portions of the Wahalajara system – the La Laguna-Aguascalientes (LL-AGC) pipeline and the Villa de Reyes-Aguascalientes-Guadalajara (VAG) pipeline – will not come into service until March 2019. Genscape’s Mexico Natural Gas product features five-year supply and demand forecasts; prior to yesterday’s confirmation, our forecast expected these lines to enter service in January 2019.

The LL-AGC and VAG legs will play a key role in allowing U.S.-sourced pipeline gas to displace Mexico’s supply from LNG imports at the Manzanillo terminal on the Pacific Coast and the Altamira terminal on the Gulf of Mexico coast. Furthermore, these lines are expected to provide significant de-bottlenecking relief to the U.S. Permian Basin in West Texas and New Mexico, where production has grown so fast that it exceeds current pipeline takeaway capacity.

Because of the delays, we revised our forecast for LNG send-out into the Mexican market. We were expecting Mexico to import an average 150 MMcf/d in Calendar ’19, but now expect 190 MMcf/d because Permian supply to displace imports will be delayed. Monthly changes, however, are much more notable. Our revised forecast still assumes that displacement of Altamira volumes will begin in January 2019, though not with Permian gas. The Sur de Texas - Tuxpan subsea pipeline should be the first source of displacement as it now appears on pace to come online before VAG, around December 2018. Our model assumes South Texas gas will begin displacing 50 percent of Altamira imports starting in January, then increasing to 75 percent displacement in February through the remainder of the calendar year. Related: Citi: Brent-WTI Spread Could Widen To 5-Year High

Displacement of Manzanillo imports, however, do not appear possible until VAG is in place. In our revised model we begin displacing about 50 percent of Manzanillo volumes starting in March 2019, then increase it to 75 percent displacement in April 2019. Since we now anticipate higher volumes of LNG imports, we expect lower U.S. pipeline flows to Mexico in Q1 2019. Previously we were forecasting Q1 2019 flows would average 4.97 Bcf/d, we now expect volumes just shy of 4.82 Bcf/d. While the impact to total U.S. pipeline exports to Mexico is not drastic, the impact on Permian growth is. In our previous forecast, we had Permian-to-Mexico exports increasing by 0.84 Bcf/d by end of Cal ‘18. These delays now mean that bump will not materialize until March 2019.

Genscape's forecast for Mexico LNG and U.S. pipeline imports for the first half of 2019. Click to enlarge

The Wahalajara system will extend from Waha in the Permian Basin to Guadalajara in central Mexico. Click to enlarge

The Wahalajara system will extend from Waha in the Permian Basin to Guadalajara in central Mexico. The delay of the two southern legs of this system will sustain Mexico LNG imports longer than expect, and delay a bump of 0.8 Bcf/d of increased exports from the Permian until late Q1 2019.

By Rick Margolin and Esteban Trejo via Genscape.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News