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Mexico's system operator Cenagas wants to control operations on all Mexico's gas lines


 


 

By Daniel Rodriguez / Platts

MEXICO CITY
Petroleumworld 04 04 2019

Mexico's natural gas pipeline system operator Cenagas thinks it should oversee the operations of all gas pipelines in the country, including new private lines anchored by state power utility CFE over the last decade, Cenagas' general director said Monday.

"For an efficient gas market in Mexico, the country requires a single system operator," Cenagas' Elvira Daniels said at a public consultation forum organized by the agency.

Neither the ownership nor operations of all pipelines in Mexico should be under the government, but the management of all the pipeline capacity in Mexico should be under the direction of the state, Daniels said.

"This guarantees equal conditions, open access to the system, and competition in the market to all users," she added.

Cenagas envisions becoming a single nationwide system operator, something that will require the approval of CFE, which holds all capacity across multiple new pipeline systems developed over the last decade, Daniels said.

"What we have to guarantee is the management of the capacity is done by a single entity, which is Cenagas' mandate," she added.

The capacity that CFE will not use has to be granted to Cenagas to be offered by the system operator under an open season, Daniels said.

This plan would require the approval of CFE's general director, Manuel Bartlett, and President Andres Manuel Lopez Obrador, she added.

"We are working as a unit in the energy sector... and we have weekly meetings [with CFE], and our mandate from the president is that the energy sector operates in unit," she added.

CFE first has to solve the negotiation of transportation contracts that anchored the construction of new pipelines, Daniels said. The government cannot discuss offering any excess pipeline capacity in new pipelines via Cenagas before then, she added.

According to Daniels, Kinder Morgan and Engie are also considering allowing Cengas to manage capacity for their pipelines in Mexico.

MEXICO ECONOMIC GROWTH

Cenagas is currently holding its annual nationwide, non-binding public consultation to plan how to balance Mexico's future gas needs and to plan new infrastructure projects. The system operator is implementing a new format where it is seeking users to share 15-year growth and gas demand projections compared with five years as the previous administration of President Enrique Pena Nieto did.

"We may not be able to fulfill at your demand this year, but we will be able to do it in the future going forward," she added.

Daniels said that President Lopez Obrador considers it is important to bring natural gas to the last six states in Mexico without access to this fuel. These are Quintana Roo, Guerrero, Nayarit, Oaxaca, Baja California Sur and Chiapas.

"It is irresponsible for the state to leave these states without natural gas," she added. "There is a clear correlation between gas access and poverty."

At the forum, Graciela Marquez Colin, Mexico's economy secretary, said that gas demand is a key economic driver in Mexico.

"It is indispensable to promote Mexico's natural gas market to promote growth," said Marquez, adding that the industrial sector only represents a fifth of Mexico's total gas demand, a level the new government wants to increase

According to Marquez, every dollar spent in gas infrastructure has an impact in the country's annual GDP growth nine times higher than the construction sector.

Mexico's Concamin national industrial confederation says domestic gas demand is growing at 1.5 times the country's GDP growth. If the new administration achieves its demand goal of 4% annually, it will increase by 40% in six years, it has estimated.

 


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Story by Daniel Rodriguez; Edited by Richard Rubin from Platts / SPGlobal.

- newsdesk@spglobal.com

spglobal.com 04 01 2019

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