Mexico City – May 10, 2016 – S&P Global Platts, the leading independent provider of information and benchmark prices for the commodities and energy markets, today launched Platts Mexico Energy Monthly, which delivers news, supply and demand analysis — including energy exports and imports — and pricing coverage around Mexico’s energy reform.
“Pipeline capacity across the U.S. – Mexico border is expected to double in the next three years, reaching 14.7 billion cubic feet per day (Bcf/d) by the end of 2019,” said Anne Swedberg, Platts Analytics manager, Platts Mexico Energy Monthly. “While liquefied natural gas (LNG) exports have captured headlines recently, U.S. natural gas exports to Mexico will remain an important feature in the U.S. natural gas market for decades to come. Further, liberalization of Mexico’s energy sector also will bring major investment opportunities to U.S. and other global players seeking a foothold in Mexico’s exploration and production, midstream and power sectors.”
Following are highlights and forecasts found in the first edition of Platts Mexico Energy Monthly:
- Mexico’s total natural gas demand will reach 8.3 (Bcf/d) in September 2016, a 5% increase from 2015.
- The higher year-over-year natural gas demand is expected to be driven by 0.15 Bcf/d of additional gas-fired power generation demand.
- Higher demand from the power sector is still lower than expected, as Mexico continues its plan to add nearly 2.6 gigawatts of gas-fired generation capacity between January and September of this year.
- Although Mexico has an aggressive fuel oil phase-out plan, fuel oil consumption in the power sector from January to March 2016 more than doubled compared to the same period last year.
- A rebound of fuel oil consumption does not bode well for Comision Federal de Electricidad (CFE’s) plan to reduce fuel oil consumption by 90% by 2018.
- U.S. natural gas exports to Mexico could reach nearly 4.2 Bcf/d by September, about 6 times the expected average daily exports of LNG from Sabine Pass in 2016. In September 2015, U.S. natural gas exports to Mexico averaged 3.3 Bcf/d.
- Mexico’s demand for natural gas from the U.S. is limited by Mexico’s internal pipeline constraints making it difficult to move gas from the producing regions to demand markets. However, 2015 pipeline expansions, primarily on the Los Ramones system, have allowed U.S. pipeline gas to replace a 0.5 Bcf/d combined drop in domestic production and LNG imports.
- Pipeline capacity between the U.S. and Mexico is set to expand to around 14.7 Bcf/d by 2019, more than twice the current level and nearly four times as much compared to 2010.
- April marked the first full month with day-ahead market operation across all three regional power systems in Mexico. On-peak wholesale power prices on the mainland’s Interconnected System remained flat from March, while the Baja California and Baja California Sur systems saw prices climb 3% and 31% respectively.
“Customers who follow Mexico’s energy reform developments, are doing business in Mexico or seek to do business in Mexico, will find this new service essential,” said William Dailey, senior commercial director for gas and power, S&P Global Platts. “It includes access to an infrastructure database that tracks development in Mexico, in addition to regular reports providing analysis and data coverage surpassing anything already existing for the Mexico-interested energy and commodities audiences. With Mexico on the brink of fully opening its energy markets, this new service provides producers, transport and mid-stream companies, consumers, and investors with timely insights that will help them recognize and develop first-mover opportunities.”
Each monthly issue, which is available online and as a PDF on the second Monday of each month, will include news, market commentary, supply and demand analysis, natural gas forecasts, production capacities, offshore bid auction updates, energy export/import flows, wholesale power prices, and special feature from Platts Analytics. In addition, Platts Analytics’ Mexico Facilities Databank provides ongoing access to data on existing and proposed energy infrastructure for power, gas, oil and related commodities in Mexico.
For more information on Platts Mexico Energy Monthly, visit www.platts.com/products/mexico-energy-monthly.
Separately, in January 2016, Mexico’s federal government entered an exclusive agreement with Platts to utilize Platts oil and natural gas price data in the nation-s pricing formulas as part of its energy reform policy.
Data Sources: Platts