Newspaper article Roll Call

Natural Gas Exports to Mexico Are on the Rise

Newspaper article Roll Call

Natural Gas Exports to Mexico Are on the Rise

Article excerpt

While pressure to expedite U.S. government approval of liquefied natural gas exports continues, capacity to send natural gas to Mexico just expanded.

Last week, Mexican President Enrique Pena Nieto celebrated the completion of a new pipeline system to bring Eagle Ford shale gas across the border near Rio Grande City, Texas, to Los Ramones, Mexico. He said the pipeline will increase import capacity from the U.S. by 45 percent.

The first phase of the Los Ramones system adds 2.1 billion cubic square feet of daily capacity, on par with some of the largest LNG export projects underway.

About 69 million cubic square feet of gas was exported by pipeline to Mexico in September, a rate that has doubled since 2010. The increase will continue, according to Shirley Neff, senior adviser at the Energy Department's Energy Information Administration. "We expect to see more exports to Mexico and also to Canada," she said.

The Los Ramones project is a main component of Mexico's energy reformation, following a 2013 constitutional amendment to privatize the country's oil and gas production.

"Everything is going to change in a big way," said former Mexican Energy Secretary Jordy Herrera, speaking at an event at the Woodrow Wilson center last month.

Opening Doors

Beyond opening the doors for private companies to bring in more imports, the new laws have opened up investment to develop Mexico's resources, which have seen declining production as major oil reserves in the south have become depleted.

"Mexico does not have a problem with resources," Herrera said. "We have a problem with money."

Geology knows no borders, and the same oil-bearing shale formations, or "plays," that have brought such a boom in production in Texas extend south.

"Mexico for the first time is going to have money to develop those resources," Herrera said, tapping into shale and other unconventional oil as well as deep and ultra-deep wells in the Gulf of Mexico.

But the country's pipeline network is 15 percent the size of the system that crisscrosses Texas, which hampers development, he said. …

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