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FORESIGHT 2020

What will 2020 look like for Mexico gas and power?

by Rodrigo Rosas, Research Gas Analyst, Mexico

While political and regulatory uncertainty remains a major question going forward, what can we expect in the year ahead? Newer energy policy could potentially lower gas-to-power demand, pipeline debottlenecking could boost regional gas markets.

What will our analysts be watching in the year ahead? We highlight our top four themes.

  1. Will newer energy policy lower gas-to-power demand?
  2. Pipeline debottlenecking to boost regional gas markets
  3. First year for natural gas storage tender?
  4. Battle to be the first liquefaction facility in Mexico

This article features key points from the report, Mexico Gas & Power Service: what to look for in 2020. Fill in the form on this page to get our full analysis, with charts and predictions for the year ahead.

1. Energy policy could lower gas-to-power demand

In September, President Andrés Manuel López Obrador (AMLO) presented a MXN6.1 trillion (US$311 billion) budget for 2020. The Ministry of Energy – SENER – recorded a 78% year-over-year budgetary increase that allocates funds to start the construction of the Dos Bocas refinery. Mexico’s new energy approach will commit to the maintenance of its aging refining system and gradual increase of crude runs while also adding new refining capacity.

2.Gas imports will continue to rise as debottlenecking efforts continue

Despite political risk to gas-to-power demand, the gas pipeline network is set to grow, which will increase piped imports from the United States.

With new infrastructure reaching previously inaccessible areas, regional demand will continue to increase.

3. Will 2020 be the year for the first natural gas storage tender?

Mexico only has the LNG tanks as a storage option. Current storage capacity will last for two days, a clear risk for energy security. On several occasions, AMLO has voiced his displeasure with the high import dependency.

Download our complimentary Insight to find out what a short-term solution could be.

4. Head-to-head battle for the first liquefaction facility in Mexico

Japan is the world’s largest LNG importer and home to the most significant regas capacity in the world. Malaysia, Qatar, and Australia dominate Japan’s contract mix at present, but US LNG is starting to make a push.

China, South Korea, and Japan have quickly become a top destination for US-sourced LNG, accounting for close to 35% of total US LNG exports - cumulative from February 2016 through October 2019.

Fill in the form to get our complimentary report 'Mexico Gas & Power Service: What to watch in 2020'

 

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