Natural Gas Infrastructure in Mexico
Mexican energy sector were opened
for private participation, including
transportation, storage and distribution
of natural gas. Since then, Mexico has
received significant investments from
transnational companies that provide
natural gas midstream services. This has
been most evident in two areas. First,
in gas distribution, where the Energy
Regulatory Commission (Comisión
Reguladora de Energía, "CRE"), the
federal regulatory agency, has granted
more than 20 permits covering several
geographic areas throughout the country.
Second, in storage and regasification
of liquefied natural gas, which takes
place at the import terminals of Altamira
on the Gulf coast, and Ensenada and
Manzanillo, both located on the Pacific
coast. Also, some Mexican distribution
companies have operated in several
cities in northern Mexico, and others
have taken advantage of the niche
market created by the self-supply
scheme.
domestic investments have been made
in the transportation of natural gas,
Petróleos Mexicanos ("Pemex"), through
its subsidiary organism, Pemex Gas y
Petroquímica Básica ("PGPB"), has
continued to be an extremely dominant
player. Until last year, PGPB was still
the owner of approximately 90% of all
natural gas transportation infrastructure,
including the National Pipeline System
(Sistema Nacional de Gasoductos,
"SNG") and the Naco-Hermosillo system.
This scenario was deplorable, given that
PGPB was the sole supplier of natural
gas of domestic origin, without the
law requiring the creation of "Chinese
walls" for unbundling transportation and
commercialization activities, without real
capacity reservation in place, and with
a widespread "at the door" gas delivery
scheme for large consumers. For years,
the CRE attempted to implement the so-
called "permanent regime" of first-hand
sales of natural gas, which implied the
capacity reservation in the transportation
system, but it was never able to
effective regulatory tools, and a lack of
political will by successive government
administrations then in power.
The absence of adequate incentives
for the construction of infrastructure,
especially in the northern and western
parts of the country, and the supply
shortages from the southeast, gave rise
to the "critical alerts" of 2011 and
2012, operative imbalances that made
clear that the "timid" opening model
had reached its limit. Attention to this
crisis forced the federal government to
promote the importation of liquefied
natural gas utilizing the available
capacity of the Manzanillo terminal. The
regulatory impact of such was reflected
in the increase of the SNG rates and,
ultimately, in higher costs for end users.
Since the end of 2011, it became
clear that there was an urgent need
to construct a huge gas pipeline that
would connect the enormous production
of natural gas in south Texas with the
increasing demand in northern Mexico
Cavazos & Newton from its office in Austin, Texas. Previously, he
worked for many years in the Mexican government. From 2009
to 2012, he served as General Counsel of the Mexican Energy
Regulatory Commission, leading the implementation of Mexico's
2008 energy reform in the gas and the renewable energy sectors.
Torre Metrocorp, Avenida Tecamachalco
No. 14-502
Colonia Lomas de Chapultepec
Mexico City, Mexico C.P. 11010
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