Uncertainty about additional gas transportation capacities in Mexico

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Uncertainty about additional gas transportation capacities in Mexico

Tue, 08/15/2017 - 09:06
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A cloud of uncertainty hangs over the latest auction for natural gas transportation capacity by system operator CENAGAS (Diego Grandi / Shutterstock)
A cloud of uncertainty hangs over the latest auction for natural gas transportation capacity by system operator CENAGAS (Diego Grandi / Shutterstock)

In light of a deficient pipeline transportation infrastructure and of power plants that struggle to come online, not a single bid to participate in the current round has been received by CENAGAS in Mexico. The state has thus called the auction null and void.

The round offered 2.1 billion cubic feet (bcf), or 60 million cubic metres/day, of pipeline capacity belonging to CFE International - the US-based fuels trading arm of Mexico’s state power utility CFE - in five different pipelines linking gas hubs in the southern US to the border.

Mexican authorities say another 12 months are required before the infrastructure developments will be completed. Then they anticipate the next auction to be a success.

Of the five new pipelines to be auctioned, four will connect to new power plants being built in the west. Interconnecting these pipelines will expand the natural gas market into most regions of the country.

"It is really hard for shippers to bid for capacity coming at Transpecos if they don't know if the interconnecting pipelines under construction will be ready for 2018," said Ross Wyeno, senior market analyst at Platts.

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