Mexico's $2.5 billion Sur de Texas-Tuxpan gas line finally move forward
Mexico's War Against a Gas Line Is Over. Now Comes the Hard Part
Sur de Texas-Tuxpan pipeline faces infrastructure hurdles
Genscape, Tudor Pickering expect gas flows to be incremental
Amy Stillman / Bloomberg
Petroleumworld 08 30 2019
After Mexico reached a deal ending a months-long dispute with some pipeline operators in the country, Sempra Energy 's Mexico unit, IEnova , and TC Energy Corrp. are free to move forward with their $2.5 billion Sur de Texas-Tuxpan natural gas project. Now the hard part starts.
Completed in June, the massive conduit is expected to be in service within about a week. But pipeline bottlenecks in Mexico threaten to limit flows on the line, which is supposed to deliver gas from Texas to power generation plants in Tamaulipas and Veracruz. At its full capacity of 2.6 billion cubic feet a day, the pipeline would grow Mexico's import capability by 40%.
But flows are likely to reach just 500 million cubic feet a day in September and 1.2 million in the first quarter of 2020, Tudor Pickering Holt & Co. said in a research note Tuesday. The firm projected that natural gas imports from the U.S. would slow from 2021 due to decreased demand.
READ: Mexico's AMLO Sees $4.5 Billion in Savings in Pipeline Pacts
Genscape Inc. Mexico gas analyst Ricardo Falcon estimates that September flows will be even lower -- no more than 200 million to 300 million cubic feet a day, depending on whether Mexico's Federal Electricity Commission, or CFE, decides to keep three liquefied natural gas cargoes it's ordered from Royal Dutch Shell Plc for next month. The cargoes could create an abundance of supply, he said.
The Sur de Texas-Tuxpan also faces the challenge of servicing multiple points throughout the country, putting it in competition with other pipelines, as well as LNG arriving at the port of Altamira, according to Falcon. And while the line's capacity is substantial, it may not be able to ramp up quickly. In our assessment there's going to be an incremental process to reach more significant gas flows, he said.
Demand is an issue, as well. CFE has said 14 power generation plants will potentially receive gas from the line, but only five have been confirmed for development so far, said Falcon. Meeting its goals will be tough before the end of the government term in 2024, he added. How much capacity can actually come online before the end of the current presidential administration? It's still a question that has to be answered by CFE.
With assistance by Naureen S Malik
Story by Amy Stillman from Bloomberg.
bloomberg.com / 08 29 2019
We invite you to join us as a sponsor.Circulated Videos, Articles, Opinions and Reports which carry your name and brand are used to target Entrepreneurs through our site, promoting your organization’s services. The opportunity is to insert in our stories pages short attention-grabbing videos, or to publish your own feature stories.
Copyright© 1999-2019 Petroleumworld or respective author or news agency. All rights reserved.
We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions Petroleumworld.com as the source.
Other stories you have to get authorization by its authors. Internet web links to http://www.petroleumworld.com are appreciated.
Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write to email@example.com
By using this link, you agree to allow PW
to publish your comments on our letters page.
Any question or suggestions,
please write to: firstname.lastname@example.org
Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels