Mexico Gas and Power Highlights

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Report summary

Mexico's gas and power sector is transforming dramatically. Gas will increasingly become the fuel of choice in the power sector, displacing fuel oil and supporting load growth. Meanwhile, domestic production is declining, with additional gas volumes several years away. Deepwater associated gas provides the most upside to Mexican production, but with lead times approaching a decade it will be several years before it can reverse declining production. As a result, Mexico will import even more gas from the US. Furthermore, due to changes resulting from the energy reform, generation costs and regulated end-user power prices are declining. Industrial power prices are relatively high, and falling prices could spur additional industrial development. Per capita energy demand is highly unequal across Mexico. If the poorer, and often hotter, areas' economies improve, energy demand will also increase.

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