Page 4 - LatAmOil Week 40 2022

LatAmOil COMMENTARY LatAmOil

(Image: EIA)

Details emerge about

Mexico’s LNG plans

Mexico’s offer to help supply gas to Europe appears to rely more on the use of existing

or planned pipelines carrying gas from Texas than on boosting domestic production

ALTHOUGH Mexico does produce natural supplies.
gas, it does not extract enough to cover 100% Speaking during a state visit to Mexico City,
WHAT: of demand, which amounted to more than 9bn Steinmeier told reporters that the Mexican
Details are emerging cubic feet (254.9mn cubic metres) per day as president had offered to provide assistance in
about potential options of 2021. As a result, it is heavily dependent on supplying Europe with LNG. Lopez Obrador
for shipping LNG from imported supplies. “offered to step up co-operation on liquid gas,”
Mexico to Europe. More specifically, it is heavily dependent on he said after a meeting in the presidential palace.
overland pipeline shipments from the neigh- At that time, neither Steinmeier nor Lopez
WHY: bouring US, especially from fields in the Texas Obrador offered any explanation as to what
Since Mexico depends section of the Permian basin. These deliveries form such assistance might take. Since then,
on imported gas, most of account for most of Mexico’s imports, and they however, more information has come to light
the plans under consid- now make up more than half of the country’s on what Mexico might be able to do on Europe’s
eration do not centre on
domestic production. consumption. Indeed, data compiled by the US behalf. This article attempts to provide a sum-
Energy Information Administration (EIA) show mary of that information and a brief look at its
WHAT NEXT: that US gas deliveries made up no less than 76% implications.
More questions are likely of Mexico’s total gas consumption on certain
to arise if Mexico pushes days in mid-2021. Gas and pipelines from Texas
forward with these LNG This dependence on imports has not discour- One point that stands out is that for the most
plans. aged Mexico from cultivating dreams of becom- part, the plans are not based on the idea of ramp-
ing a gas exporter, however. These dreams were ing up Mexican gas production in order to meet
put on display last month, when Mexican Presi- European gas demand. Rather, they are largely
dent Andres Manuel Lopez Obrador reportedly based on the idea of gaining access to Mexican
told his German counterpart Frank-Walter territory so that existing and planned gas infra-
Steinmeier that the country was ready to help structure can be used to deliver feedstock to gas
Europe resolve its problems with respect to gas liquefaction facilities within Mexico.

P4 www. NEWSBASE .com Week 40 05•October•2022