Mexico’s Cenagas, operator of the national pipeline system known as the Sistrangas, has announced winners in the biggest open season under the administration of Andrés Manuel López Obrador.
The state-run operator offered capacity to 19 end-users, distributors and shippers on the pipeline system, with almost all bidders receiving their requested amounts of uninterruptible capacity.
This was the second open season held by Cenagas under the government of President López Obrador, and the third overall since the creation of Cenagas in 2014. A smaller process for 22.1 MMcf/d took place last year.
The biggest winner of pipeline capacity was at the border interconnection between the 48-inch diameter Ramones pipeline in Mexico and the NET Mexico pipeline in Texas. Cenagas was offering 230,894.47 GJ, or 210 MMcf/d, of capacity at the Ramones/NET Mexico interconnect.
Major winners of capacity with injection at this point included Energía San Luis de La Paz SA de CV, a power plant in Guanajuato in the center of the country. It won 36,000,000 GJ/d of capacity to import from the border.
Petrochemicals giant Braskem Idesa SAPI was awarded 20,000,000 GJ/d at the same injection point.
Navarrés Gas Natural’s Norberto Catalan told NGI’s Mexico GPI that one of the surprises of the open season was the distances reserved in the process. “Braskem is in zone 8 and was given flow to import gas from zone 3,” he said.
There are nine Cenagas rate zones divided between the different geographical areas served by the pipeline system. Zone 3 is in the northeast bordering Texas, and zone 8 is in the southeast. Braskem Idesa’s operations are in Coatzacoalcos, in the state of Veracruz.
Catalan added that another distinguishing feature of the open season was that natural gas marketers were able to stake their claim on the national pipeline system.
Shell Trading Mexico S de RL de CV was awarded 23,066,816 GJ/d, with injection at V032 Impcoral at the Kinder Morgan Border Pipeline. Macquarie Energy Mexico S de RL de CV won capacity on numerous routes.
“My first take is that it was an unexpected success,” Mexico trader Santiago Villareal told NGI’s Mexico GPI. “Cenagas allocated all the spare capacity, and the winners were distribution companies and marketers.”
For a full list of winners including daily capacity and routes, click here.
Mexico Imports
Mexico imports of U.S. gas continue to rise after the December slowdown. Over the past 10 days, Mexico imported 6.40 Bcf/d of U.S. pipeline gas, an increase of 0.51 Bcf/d over the previous 10-day period.
“These figures indicate a significant increase in gas demand,” NGI analyst Josiah Clinedinst said. “With next week’s potential freeze across Texas though we could see a drop in exports to Mexico if the Texas pipeline grid does not hold up infrastructurally.”
Wood Mackenzie analysts see another big year for U.S. pipeline imports into Mexico.
Wood Mackenzie analyst Ricardo Fálcon told NGI’s Mexico GPI that imports are up 2% in January compared to December. “Such a rebound is largely led by South Texas volumes servicing Mexican pipelines, especially via NET Mexico Pipeline into Los Ramones.”
He said the figure was partly driven by “still-weak Mexican dry gas output, which has hardly surpassed the 2.3-Bcf/d mark since July 2023.”
Falcón added that lower Mexico gas output “together with the expected boost from new demand for natural gas, will likely contribute to robust Mexico imports throughout 2024.”
NatGas Prices
North American natural gas prices have finally found momentum this winter amid cold weather and tightening supply levels. On Thursday, the February New York Mercantile Exchange gas futures contract gained 5.8 cents day/day to settle at $3.097/MMBtu.
In Mexico on Wednesday, natural gas cash prices at Los Ramones jumped 18.3 cents day/day to $3.190, according to NGI data. Monterrey via the Mier-Monterrey system was up 18.2 cents to $2.982. Tuxpan in Veracruz via Cenagas saw the spot price rise 18.1 cents to $3.700.
Out West, the Guadalajara natural gas price rose 27.4 cents to $3.939 on Wednesday. Farther north in El Encino, prices via Tarahumara were $3.336, 36.9 cents higher than the previous day. On the Yucatán Peninsula, the cash price at Mérida was $4.658 on Wednesday, up 17.8 cents.
U.S. Storage
On Thursday, the U.S. Energy Information Administration (EIA) reported a 140 Bcf withdrawal from storage for the week ending Jan. 5. The result propelled prices higher.
The South Central region, close to Mexico pipelines, saw a 41 Bcf decrease in natural gas supplies. That included a 29 Bcf pull from nonsalt facilities and a 12 Bcf withdrawal from salts.
For the week ended Jan. 5, total working gas in the U.S. South Central region stood at 1,160 Bcf, up from 1,063 Bcf for the same time one year ago. The figure was 107 Bcf higher than the five-year average of 1,053 Bcf, according to EIA.
