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U.S. Gas Pipeline Export Capacity To Mexico To Nearly Double By 2018

U.S. pipeline capacity for natural gas exports to Mexico is expected to almost double by the end of 2018 from the current pipeline capacity of 7.3 billion cubic feet per day (Bcf/d), the U.S. Energy Information Administration (EIA) said on Thursday.

U.S. export capacity has been expanding rapidly in recent years, with abundant and cheaper-than-LNG-imported gas in the U.S. on the one hand, and Mexico’s rising natural gas demand for the power sector and declining domestic output, on the other hand. These factors are driving the expansion of the U.S.-Mexico cross-border pipeline network, the EIA noted.

Currently, cross-border natural gas pipelines supply Mexico’s northeast and central regions. The planned new capacity over the next couple of years will also supply the northwestern regions.

Next year, four pipelines currently under construction are expected to start delivering natural gas to Mexico. These are Roadrunner Phase II, Comanche Trail, Presidio Crossing (also known as Trans-Pecos), and Nueva Era. The four pipelines will have a combined capacity of 3.5 Bcf/d and will supply natural gas to newly built gas-fired power stations in Mexico’s states of Chihuahua, Nuevo Leon, Sonora, and Sinaloa.

Then, by the end of 2018, another two pipelines with a total capacity of 3.3 Bcf/d - KM Mier-Monterrey and Neuces-Brownsville – are expected to start exporting U.S. gas, mostly from the Eagle Ford in southern Texas, to the northeast and central Mexican regions.

Related: Bearish EIA Data Can’t Keep Oil From Rallying

While the U.S. pipeline exports are growing, Mexico is also expanding its domestic pipeline infrastructure and currently has 12 pipelines in development with a combined capacity of 9.7 Bcf/d, the U.S. administration said.

U.S. natural gas exports via pipelines have started gradually replacing Mexico’s LNG imports, which have been falling in the past few months and quarters.

U.S. pipeline exports of natural gas to Mexico have doubled since 2009, the EIA said on Wednesday.

At 80 billion cubic feet of production per day, the U.S. produces 25 percent of the world’s total natural gas. In 2020, while Australia will rival Qatar for the top spot as the world’s largest LNG producer for export, the U.S. is likely to follow close behind in the third position.

By Tsvetana Paraskova for Oilprice.com 

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