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U.S. energy sales account for more than 50 percent of Mexico’s current energy imports as Mexican energy reforms open the market and as the country is switching to natural gas-fired electricity production, the Washington Examiner reported on Monday, citing an S&P Global Platts report due to be released this week.
“Pipeline imports of U.S. natural gas make up nearly 60 percent of total Mexican natural gas supply, compared to just 22 percent in 2010,” the report, viewed by the Washington Examiner, said.
“Platts Analytics expects that U.S. natural gas imports will rise to nearly 70 percent of total supply by 2022,” according to the report.
According to the EIA, the U.S.-Mexico energy trade has significantly changed in recent years. Historically, the energy trade has been driven by Mexico’s sales of crude oil to the United States and by U.S. net exports of refined petroleum products to Mexico.
The value of U.S. energy exports to Mexico, including rapidly growing volumes of both petroleum products and natural gas, exceeded the value of U.S. energy imports from Mexico in 2015 and 2016, as volumes of Mexican crude oil sold in the United States continued to drop. Last year, the value of U.S. energy exports to Mexico was US$20.2 billion, while the value of U.S. energy imports from Mexico was US$8.7 billion, according to the EIA.
According to the S&P Global Platts report, as carried by the Washington Examiner:
“Unable to meet growing demand with local production, Mexico is opening its refined products markets to competition.”
“Imports of U.S. petroleum products over the first four months of 2017 were up over 125 percent year-on-year. Mexico is in the process of expanding its refined products pipelines and terminals, and allowing outside access to existing assets.”
In May this year, ExxonMobil announced plans to enter the Mexican fuels market in 2017 by opening its first Mobil service station in central Mexico during the second half, and additional stations will open later this year. ExxonMobil plans to invest about US$300 million in fuels logistics, product inventories, and marketing over the next 10 years.
In March, BP opened its first retail fuels site in Mexico as part of a plan to invest in the growing Mexican retail fuel and convenience market over the next five years.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.