U.S. Nat Gas Imports Grow As Mexico’s Production Drops

06 December 2018

Mexico’s natural gas production has dropped 38% since 2012, forcing the country to rely on United States-based imports, according to the U.S. Energy Information Administration (EIA). Declining revenues, a low-price environment and limited exploration and new well production have influenced Mexico’s reliance on its neighbors to the north.

Mexico’s natural gas production was 2.4 Bcfd (67.9 X 106 m3/d) in October. That level is down 7% from last year’s levels, which averaged 2.5 Bcfd (70.8 X 106 m3/d). Two years prior, those levels were even higher at 3 Bcfd (84.9 X 106 m3/d), according to Petróleos Mexicanos (PEMEX).

Due to this decline, the United States has imported more natural gas to Mexico. According to EIA data for August, U.S. natural gas pipeline exports to Mexico grew 13% compared to last year’s amounts, thanks to several new pipeline projects entering service. In August 2018, the U.S. sent 5.1 Bcfd (144 X 106 m3/d) of natural gas to Mexico compared with 4.5 Bcfd (127 X 106 m3/d) in August 2017.

Liquified natural gas (LNG) also plays a vital role in Mexico’s energy demands. The country didn’t need LNG from the U.S. until 2016. As of August, 77% of the country’s total LNG imports are from the United States, up from 63% in 2017, according to the EIA and data from Mexico’s Secretaría de Economía.

President Andrés Manuel López Obrador, who took office on December 1, plans to reevaluate Mexico’s current energy reforms, enacted by the previous administration in 2013.

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