Mexico's Cenagas Launches First Natural Gas Pipeline Open ... - Natural Gas Intelligence
Mexico’s Cenagas Launches First Natural Gas Pipeline Open Season Under AMLO - Natural Gas Intelligence
This article is part of NGI's Mexico Gas Price Index. Click here to request a trial keyboard_arrow_right
Regulatory| Infrastructure| NGI All News Access
Mexico’s Cenagas Launches First Natural Gas Pipeline Open Season Under AMLO
Mexico’s Centro Nacional de Control del Gas Natural (Cenagas) has launched its first open season for firm natural gas transport capacity since President Andrés Manuel López Obrador took office in 2018.
Cenagas, the independent operator of Mexico’s Sistrangas national pipeline network, is offering shippers 22.1 MMcf/d of uninterruptible capacity on the existing Valtierrilla-Cárdenas natural gas pipeline.
The 24-inch diameter pipeline stretches about 275 miles from Valtierrilla, Guanajuato, to Lázaro Cárdenas, Michoacan, on Mexico’s Pacific Coast.
The pipeline’s capacity as originally designed was 248.6 MMcf/d, of which 188.1 MMcf/d is currently contracted on a firm basis. However, following completion of the new Patzcuaro compressor station, contracted firm capacity on the pipeline would increase to a total of 226.4 MMcf/d. This leaves 22.1 MMcf/d available for shippers via the open season, Cenagas said.
Steelmaker Arcelormittal SA and Cenagas announced in 2020 they would jointly develop the new compressor station to serve Arcelormittal’s operations in Lázaro Cárdenas.
The open season launched on Friday (March 24) and is slated to close on June 30, giving shippers about three months to solicit transport service on the pipeline. Interested parties must secure their electronic bulletin board credentials by April 25.
More information on the process can be found here in Spanish.
The open season is in strict compliance with the open access rules established under Mexico’s 2013-2014 energy reform, Cenagas said.
Although the capacity on offer is small in proportion to Mexico’s gas market overall, the open season is a significant milestone for the government of López Obrador, known commonly as AMLO. His regime has sought to roll back the previous regime’s energy reforms.
Cenagas has not held an open season since 2017, preventing shippers other than CFE and state oil company Petróleos Mexicanos (Pemex) from securing capacity.
CFE management has signaled its plans to make capacity available on both sides of the U.S.-Mexico border, though no formal process has been launched.
The open season follows the announcement by Cenagas in February of the contract renewal process on the national pipeline system.
“The timing of the announcement is quite opportune given that the majority of the current contracts in the market will expire at the end of the first half of this year,” said Gadex energy consultancy co-founder Eduardo Prud’homme in a recent NGI column.
The open season, meanwhile, is “very positive” news for the market, David Rosales, natural gas partner at consultancy Elevation Ideas, told NGI.
“It has become very complicated to obtain interconnections with Cenagas,” Rosales said. “The recurring answer has been that there is no capacity and there are only interruptible contracts.”
On the Valtierrilla-Cárdenas pipeline at least, it seems that Cenagas is remembering that it has a mechanism that could allow it to have firm [transport] service.”
Rosales said it is difficult for large gas consumers in most of Mexico to secure both natural gas molecules and transport capacity, with the exception of the area around Monterrey.
The open season is a “good start” to achieving more competition in Mexico’s gas market and investment overall in the country, Rosales said. “It’s better to applaud it than criticize it, even if it’s small. Let’s hope it goes well and materializes in the next step, which is an expansion of the system…”
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 2577-9877 | ISSN © 2577-9966 |