Company hopeful on Mexican gas demand growth, LNG exports. Mexico’s new president supportive of gas infrastructure. Southeast Gateway pipeline on track for 2025 completion
Sheky Espejo, S&P Global Platts
MEXICO CITY
EnergiesNet.com 08 06 2024
TC Energy is optimistic about the growth prospects of its Mexican business, but will keep its exposure to the country limited, management said Aug. 1.
“We are very bullish about the role Mexico will play in the North American gas market, both for the country’s demand growth and also for potential LNG exports from Mexico,” Francois Poirier, president and CEO said during the company’s Q2 earnings call.
On average, Mexico has imported 6.2 Bcf/d of gas from the US via pipeline in 2024; production has been 2.6 Bcf/d and total demand has been 7.9 Bcf/d, according to data compiled by S&P Global Commodity Insights. Of the total demand, roughly 4 Bcf/d are required to generate electricity; 1.8 Bcf/d are for the industry and 1.9 Bcf/d are required by Pemex for its upstream operations, the data shows.
In the second quarter of 2024, gas volumes into Mexico through TC Energy’s lines were 3 Bcf/d on average, but the company set a new record high of 4 Bcf/d in May, TC Energy said. The recently announced LNG projects in the country could also increase the amount of gas the country will need to import, but it is not clear how many of those projects will actually come to operate. New Fortress Energy’s Altamira project is currently the most advanced.
The new president-elect Claudia Sheinbaum Pardo has made supportive statements publicly about the importance of natural gas transmission to achieve the socioeconomic goals of the country, Poirier said.
“We see a continuation of supportive policy for natural gas transmission,” he said, but noted that the aggregate exposure to the country will remain the way it is now, at roughly 15% of the total consolidated EBITDA of the company.
Before making any more investments, the company would either have to find a joint venture partner for Mexico or grow its other franchises at a faster pace, he said.
Southeast Gateway on track
The company is running on track with the construction of a 715 kilometer-long 1.3 Bcf/d marine pipeline in the Gulf of Mexico which is expected to begin operations in 2025.
The pipeline, known as the Southeast Gateway, will serve as a continuation of TC Energy’s 770 kilometer 2.6 Bcf/d marine pipeline that brings gas from Valley Crossing, in Texas, to the port of Tuxpan in Veracruz. The Southeast Gateway will bring gas to the port of Dos Bocas, in Tabasco, where the Mexican government has built a new refinery.
The offshore trench of the pipeline, which comprises 670 km, is 98% completed, management said during the call. All the deepwater pipeline is installed and only 3 km of pipeline in shallow-waters is missing, the company said.
“Our team is laser-focused to get this project place in service on time and on budget as safely and efficiently as possible, and I think at this time we are in a position to do that,” said Sean O’Donnell, senior vicepresident of capital markets and corporate planning.
spglobal.com 08 02 2024
