Mexico needs to do more to develop its local natural gas industry, according to a new analysis from oil and gas trade group Asociación Mexicana de Empresas de Hidrocarburos (Amexhi).
Amexhi members and researchers in a report, 2030 Mexico En Crecimiento, reviewed the pressing energy needs of the country for the remainder of the decade.
“Mexico is on the list of countries – and the only producing country – to have such a high level of dependency on one source for its natural gas,” researchers said. They pointed out that Mexico imports around 75% of its daily natural gas needs via pipeline from the United States.
Amexhi researchers said the dependency “is pernicious,” and could lead to catastrophic impacts on the nation’s economy when supply is limited, which last occurred during Winter Storm Uri in 2021.
The freak cold snap caused a 20% plunge in natural gas production in the south-central United States as power demand surged. Texas Gov. Greg Abbott then issued an executive order restricting natural gas exports outside the state. Pipeline natural gas deliveries from Texas to Mexico fell by more than 1 Bcf/d at the peak of the cold weather event, and four million Mexican customers lost power.
So far in August, Mexico is importing around 7.1 Bcf/d from the United States, sharply higher than what it produces domestically.
Mexico’s natural gas production has taken a downward turn this year. Output averaged 3.82 Bcf/d in June, down from 4.35 Bcf/d in the same month last year. Output has been down on a year/year basis each month since the start of 2024. Gas production also has fallen sequentially every month except May.
National oil company Petróleos Mexicanos (Pemex) accounted for 3.62 Bcf/d, or 95% of all production in June, down from 4.12 Bcf/d in the year-ago month.
The top five natural gas producing fields in June, all operated by Pemex, were Quesqui (552 MMcf/d), Ixachi (531 MMcf/d), Akal (302 MMcf/d), Maloob (139 MMcf/d) and Onel (122 MMcf/d).
Pemex, meanwhile, has continued to struggle financially. The state oil and gas giant reported a net loss of 255.9 billion pesos, or $13.9 billion, for the second quarter.
In a press conference around the release of the report, Amexhi representatives called for the reactivation of oil and gas lease rounds, which were scrapped in 2018.
Developing the nation’s natural gas resources would help “prevent energy cuts,” and “minimize price variations in electricity,” Amexhi researchers said. It would also spur the domestic petrochemical industry, they noted.
The use of domestic natural gas in the nation’s matrix would also replace more contaminating fuels in power generation, such as fuel oil, researchers added.
Amexhi found that 86% of all U.S. gas imported came from unconventional or shale gas deposits, which meant that around 40% of Mexican electricity depended on this kind of resource. Hydraulic fracturing, or fracking, has been disallowed by Mexico’s government, inhibiting the exploration of unconventional reserves.
“Fortunately, Mexico can jump ahead in the learning curve of other countries (such as the United States and Argentina) to apply best practices in the development of unconventional fields,” Amexhi said.
“Mexico already has the regulatory and judicial framework” in place for the development of its unconventional resources, which amount to some 64 billion boe, they said. Mexico’s natural gas resources are not being developed because “of a political energy decision” without the proper technical conversation, they added.
Mexico has around 112 billion boe of prospective oil and gas resources. About 53% of these have not been assigned to either private sector companies or Pemex, according to Amexhi.
