Mexico’s natural gas production averaged 3.90 Bcf/d in March 2024, down from 4.35 Bcf/d in March 2023.
State oil company Petróleos Mexicanos (Pemex) accounted for 3.70 Bcf/d of the total, compared to 4.13 Bcf/d in the year-ago month, data from upstream regulator Comisión Nacional de Hidrocarburos (CNH) show. Private sector operators supplied the remainder.
Pemex acknowledged steep gas production declines upon announcing its first quarter 2024 earnings. The company attributed the trend to waning associated gas recovery from the mature shallow water megafields Ku-Maloob-Zaap and Cantarell.
However, production of non-associated gas has fallen as well, including from the highly touted onshore Quesqui field.
Pemex itself is a major consumer of natural gas, accounting for 1.58 Bcf/d, or 19%, of Mexico’s total natural gas demand year-to-date through April 2024, according to Wood Mackenzie data.
Due to Pemex’s substantial gas needs and declining production, in addition to rising demand from Mexico’s power sector, the country’s pipeline gas imports from the United States have continued to grow steadily.
United States to Mexico gas flows have averaged 6.08 Bcf/d year-to-date through April 24, up by 497 MMcf/d from the same period last year, according to Wood Mackenzie data.
Mexico’s dependence on U.S. natural gas has allowed buyers of the fuel in Mexico to benefit from the recent slump in U.S. prices, particularly at the Waha hub in West Texas, a fast growing gas supply source for Mexico.
NGI’s Waha forward fixed price for June delivery stood at 56.5 cents/MMBtu as of Wednesday.
Mexico’s IPGN monthly natural gas price index averaged $1.909 in March 2024, down from $2.735 in the same month a year ago.
Management for Kinder Morgan Inc., a major transporter of U.S. gas to the Mexico border via pipeline, are expecting gas exports to Mexico to grow by more than 50% between now and 2030, CEO Kim Dang said in the firm’s recent first quarter earnings call.
Mexican state power company Comisión Federal de Electricidad (CFE) is the country’s main importer and marketer of U.S. natural gas.
In a recent update, the company touted its various partnerships and ongoing projects with the private sector to expand the country’s natural gas infrastructure as CFE grows its fleet of natural gas-fired power plants.
Quesqui remained Mexico’s top producing gas field in March at 583 MMcf/d, according to CNH. It was followed by Pemex fields Ixachi (461 MMcf/d), Akal (311 MMcf/d), Maloob (157 MMcf/d) and Onel (142 MMcf/d).
The production figures come ahead of Mexico’s presidential election on June 2. A victory by Claudia Sheinbaum, who has a commanding lead in the polls, would likely mean continued growth in gas imports from the United States and a continuation of energy policies favoring CFE and Pemex, according to Carlos Ramírez Fuentes, a partner at Integralia Consultores.
“Sheinbaum has a very clear and firm ideologic vision for the sector,” Ramírez told NGI in a recent interview. “It’s not an open market vision, it’s not one that is pro-market, it’s not one that invites foreign companies to Mexico to invest and compete with Pemex or the CFE.”
