Mexico is likely to emerge as a leader in the natural gas industry over the coming years and the country’s energy planners have announced plans to move forward with an $8 billion expansion of an existing 5, 500-mile natural gas pipeline system. The new improvements to the country’s existing infrastructure will focus on supplying Mexico’s central and northern industrial cities.
“Mexico has a unique opportunity, we have access to the world’s cheapest gas, ” stated Mexican Energy Minister Jordy Herrera, in a conversation with the Houston Chronicle about the new pipeline earlier this year. “This is competitiveness for the industry of our country.”
Mexico will work closely with U.S. natural gas suppliers from South Texas and Eagle Ford Shale fields, such as Kinder Morgan and other Houston-based pipeline and gas companies, who are eager to provide assistance.
“In Mexico, there is a growing need for additional supplies, ” Kinder Morgan announced in a statement last week.
Also of note, Mexico’s incoming president, Enrique Peña Nieto has promised to push for development of Mexico’s abundant shale fields in the northern parts of the country, which hold the world’s fourth-largest reserves of natural gas. It is expected that the U.S. and other foreign investors will be involved in the project as it develops.
According to the U.S. Energy Department, “U.S. gas exports via pipeline to Mexico have tripled in a decade, to some 500 billion cubic feet last year."
Hererra, along with a number of other officials in Mexico, say it is important for the country’s future to harness its own natural gas potential, especially as its consumption increases. To put this in perspective, over the last ten years, Herrera says there have been times when the demand for natural gas in Mexico real estate has been four times the country’s overall pace of economic growth.
Mexico’s existing natural gas pipeline grid must be expanded in order to keep up with demand in many of the fastest growing industrial cities in the country’s heartland, and the Mexican government is showing its commitment to improving the existing infrastructure by this new $8 billion commitment.