Mexico's natural gas output moving to new heights

An upward trend is sweeping Mexico's natural gas segment. 

The latest figures from hydrocarbons regulator CNH show that in January-April, the country kept up a production trend that started in May 2022 and which saw it move from of 4.7Bf3/d (billion cubic feet per day) to 5.1Bf3/d in the space of a year.

Mexican natural gas production is strongly correlated with oil output because the majority of the gas produced locally is associated, meaning it is a by-product of oil extraction. Today, roughly 60% of the gas produced in Mexico is associated.

But the new trend has been spearheaded by non-associated, or independent, gas output, meaning it is being produced in gas-first fields. While overall gas output grew by a monthly average of 0.7%, non-associated gas grew by 1.5%, adding 300Mf3/d of new output during the 12-month period. 

BNamericas with CNH data.

In the six months through April, monthly growth averaged 2.2%. Associated gas, meanwhile, grew an average of only 0.25% per month in the same period.

The surge in output has been spearheaded by national oil company Pemex's work in flagship fields, including Quesqui, Ixachi, Pokche, and Tupilco Profundo. 

Recent successful exploration has also led to a steady surge in gas reserves. According to CNH, proven gas reserves rose on average by 2% per year between 2018 and early 2023, and almost 6% a year between 2020 and 2023. Current proven reserves stand at 10.1Tf3.

BNamericas with CNH data.

A potential area to significantly grow proven reserves is incorporating shale gas through new exploratory activities, although this avenue has so far been shut down by the current administration.

President Andrés Manuel López Obrador (AMLO) said on Tuesday that shale production was still and would remain off the table, even though Pemex has often argued in favor of it.

"We have said no to fracking, we had a request from Pemex itself, and yesterday we told Pemex's director [CEO Octavio Romero Oropeza]: no, not fracking." AMLO added that the company had been denied a request to conduct hydraulic fracturing activities in Veracruz state.

The US Energy Administration estimates that Mexico has 681Tf3 of commercially recoverable shale gas, the fourth largest reservoir worldwide, although some estimates are slightly lower. 

The current fracking policy could change as Mexico will hold general elections in June next year and AMLO cannot run for a second term.