U.S. Pipeline Gas Exports to Mexico Increase Despite Pandemic
(P&GJ) — U.S. exports of natural gas to Mexico, almost all of which are transported by pipeline, have continued to increase in 2020 despite the COVID-19 crisis, according to the U.S. Energy Information Administration (EIA).
The increased pipeline exports have more than offset declines in Mexico’s imports of liquefied natural gas (LNG) and relatively smaller declines in Mexico’s domestic natural gas production, EIA said.
Mexico has been the largest destination for U.S. natural gas exports since surpassing Canada in 2015. U.S. pipeline exports of natural gas have been displacing other sources of Mexico’s natural gas, including more expensive LNG imports, which have declined every month since March 2020.
The industrial and electric power sectors accounted for all of the natural gas consumption in Mexico in 2019, with industrial at 54% and electric power at 46% of the total. Natural gas use in both of these sectors declined earlier this year because of the measures taken to contain the spread of the COVID-19 pandemic.
Mexico’s total consumption of natural gas fell to 7.5 billion cubic feet per day (Bcf/d) in May 2020, the lowest monthly volume since December 2016, according to estimates from Genscape, a Wood Mackenzie business.
By August 2020, Mexico’s natural gas consumption started to recover and surpassed last year’s values for the same months. In August, the industrial sector in Mexico consumed an average of 10% more natural gas (4.9 Bcf/d) than in August 2019, and the power sector consumed 5% more.
Natural gas is the main fuel used for electricity generation in Mexico: in 2019, 61% of the country’s electricity was generated using natural gas, according to Mexico’s National Center for Energy Control (CENACE). In 2020, even as overall electricity generation has generally remained lower than 2019 levels, Mexico’s natural gas-fired generation of electricity has increased slightly and offset lower generation levels from other sources such as fuel oil and coal.
U.S. natural gas pipeline exports to Mexico averaged 5.1 Bcf/d and accounted for 61% of the country’s natural gas supply in 2019. A new segment on the Wahalajara pipelines was completed in June 2020, and U.S natural gas exports by pipeline to Mexico rose to 5.9 Bcf/d from July through September, an increase of 0.8 Bcf/d compared with the 2019 average, according to data by S&P Global Platts.
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