Mexican gas demand is expected to average 2.7% growth until 2035. The power sector accounts for nearly 70% of this growth, supported by an additional 19.2 GW of gas-fired capacity to be added by 2018. Recent power auction results indicated renewables could compete with gas and are a key risk to gas demand. By changing gas and power regulations, the government is trying to create a market similar to that in the US. However, there is substantial uncertainty in how the market will operate under the new regulations.
Production is expected to continue to decline as investment targets oil. By 2023 gas production is at its minimum: 1,035 mmcfd. Associated gas from the deep-water Perdido basin modestly increases production post-2025.
Declining production and growing demand will force Mexico to become more dependent on imports. From 2015 to 2025, imports from the US are expected to increase from 2.8 bcfd to 6.4 bcfd. Over US$12 billion is being invested in new pipelines.
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Commodity market report | Nov 2016
Mexico gas market H1 2016 – growth and uncertainty
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