Mexico's natural gas demand will be driven by its power and industrial sectors through 2037, according to a report from Mexico’s energy ministry Sener.
The report, Prospectiva de Gas Natural 2023-2037, is a planning instrument to help with “the design of the integral national strategy around natural gas,” Sener said. It would be part of the government’s plan of strengthening state companies Petróleos Mexicanos (Pemex) and Comisión Federal de Electricidad (CFE), in conjunction with “complementary collaboration with private initiative.”
Sener sees Mexico natural gas demand rising slightly over the next two years to 8.834 Bcf/d in 2025, from around 8.758 Bc/d this year. It would then plateau at around 8.3 Bcf/d through 2037.
The agency forecasts drastic drops in the use of natural gas in the petroleum sector would offset gains in demand from the power and industrial sectors.
In 2037, Mexico’s power sector would consume 62.4% of the nation’s gas demand, or around 5.182 Bcf/d, up 6.5% from 2023. Industrial use would rise to 1.626 Bcf/d versus roughly 1.340 Bcf/d in 2023.
Use of natural gas in the petroleum sector would fall by 40% over the same timeframe.
Residential natural gas demand would rise by about 40% by 2037 to around 86 MMcf/d, according to the Sener analysis. Natural gas demand from the transportation sector would rise to 3.3 MMcf/d from 2.4 MMcf/d.
Natural gas demand in 2037 would be led by the northeast (2.881 MMcf/d), followed by the Southeast (1.792 Bcf/d) and the Bajio central region (1.574 Bcf/d).
Domestic natural gas production would rise to 5.112 Bcf/d, compared to 4.350 Bcf/d today.
Natural gas production fell to 4.085 Bcf/d in 2022 from 5.676 Bcf/d in 2012. Sener partly blamed the drop in production from 2012 to 2022 on the 2013-2014 energy reform, “which made Pemex give up 70% of its pipeline of contracts.”
Pipeline imports from the United States, meanwhile, jumped to 5.7 Bcf/d in 2022 from 2.219 Bc/f in 2012.
Increased imports of natural gas were due to “the negative tendency in natural gas production” along with increased power demand, low U.S. natural gas prices and a buildout of infrastructure to bring in the fuel.
As of August 2022, Mexico had 18,721 kilometers (11,632 miles) of natural gas pipelines stretching through vast stretches of the country.
Natural gas production through 2037 under Sener’s projections would depend on exploration and production onshore and in offshore basins, but without deepwater fieldwork. It would also assume unconventional production, assuming “the availability of new technologies that would mitigate environmental impacts.”
Sener projects around 2.5% of economic growth through to 2037 in its assumptions.
The report does not mention any planned LNG export projects, which would be sited in Mexico but use U.S. gas. These liquefied natural gas projects could lead to as much as an additional 6 Bcf/d of imported fuel.
The projections also differ from both public and private sector analysis. Mexico natural gas demand is set to expand 4.6% annually during the next decade, according to forecasts by national pipeline system operator Cenagas.
Wood Mackenzie sees U.S. exports of natural gas to Mexico alone hitting 9 Bcf/d by 2030. Mexico imports of U.S. pipeline gas rose by 8% year/year in 2023 to around 6.2 Bcf/d, according to Wood Mackenzie. The figure regularly topped 7 Bcf/d during the summer months.
Natural gas demand in Mexico, driven by the power sector, continues to rise. Power demand was up by around 440 MMcf/d in 2023 to 4.603 Bcf/d, according to Wood Mackenzie data.
Natural gas projects, including 12 combined cycle plants in construction, along with new pipelines, compressor stations and LNG export facilities, should give impetus to growth.
Furthermore, many analysts are skeptical of Pemex’s ability to ramp up or even maintain natural gas production given declines at legacy fields and the financial position of the state oil and gas behemoth.
