Mexico’s outgoing president, Andrés Manuel López Obrador, highlighted progress on various natural gas infrastructure and extraction projects during his final state of the union address on Sunday (Sept. 1).
President-elect Claudia Sheinbaum, a López Obrador ally who cruised to victory in the June general election, is set to take office Oct. 1.
No country imports more natural gas from the United States than Mexico. U.S. to Mexico pipeline flows averaged 7.08 Bcf/d over the 30-day period ended Aug. 28, up 393 MMcf/d from the same period last year, Wood Mackenzie data show. The consultancy estimated that these exports could grow by some 3 Bcf/d by 2030 versus 2023.
Over his six-year term, López Obrador – better known by his initials AMLO – has sought to strengthen national oil company Petróleos Mexicanos (Pemex) and state-owned electric utility Comisión Federal de Electricidad (CFE), and to roll back the country’s 2013-2014 energy market liberalization. CFE is Mexico’s primary importer and marketer of natural gas.
In Sunday’s speech, López Obrador noted the stabilization of oil and natural gas output in the country, which had been in freefall for over a decade when he took office. Mexico’s natural gas production has averaged 3.87 Bcf/d so far in 2024, versus 3.71 Bcf/d in 2018.
The president also celebrated New Fortress Energy Inc.’s floating liquefied natural gas export terminal off the coast of Altamira, which recently liquefied and sent out its first cargo. The terminal receives feedgas from the United States via the Sur de Texas-Tuxpan offshore pipeline, for which CFE is the anchor shipper.
On the pipeline front, López Obrador highlighted the renegotiation early in his term of several firm transport agreements between CFE and private sector pipeline developers including TC Energy Corp., Sempra Infrastructure and Esentia Energy Systems, formerly known as Fermaca. Renegotiating and simplifying the long-term contracts saved CFE $4.4 billion, according to the president, although the congressional audit office found in 2020 that the revamped contracts would cost CFE an extra $6.8 billion over their duration.
In any event, in the years since resolving the contractual dispute, CFE has announced various new projects with several of the same counterparties. These projects include the 1.3 Bcf/d Southeast Gateway offshore pipeline, which CFE is developing with TC Energy. The project is slated to enter service by mid-2025.
CFE and Grupo Carso, the conglomerate owned by billionaire Carlos Slim, also recently announced plans for a 260-mile pipeline that would span Sonora and Baja California states.
In the upstream segment, López Obrador noted the Lakach deepwater gas field off Mexico’s southeastern coast, which Grupo Carso has agreed to jointly develop with Pemex. The companies expect to reach first production in about two-and-a-half years, and to maintain output of 200 MMcf/d over eight years.
López Obrador also touted a recent agreement between Pemex and Portuguese construction firm Mota-Engil SGPS that would see Pemex supply natural gas to a new fertilizer plant at the Escolin complex in Poza Rica, Veracruz state. López Obrador has sought to revitalize natural gas-intensive fertilizer production by Pemex’s downstream unit, Pemex Transformación Industrial.
Sheinbaum, for her part, has pledged to continue prioritizing the interests of Pemex and CFE, but has signaled a willingness to work with the private sector and to advance the clean energy transition.
Sheinbaum has tapped academic Victor Rodríguez Padilla to be Pemex’s new CEO, and picked electrical engineer Emilia Esther Calleja to lead CFE.
