Mexico's pipeline projects to boost US natgas exports

Mexico’s gas pipeline project portfolio is improving the outlook for US natural gas exports.

"We expect US natural gas exports by pipeline to grow by almost 1Bf3/d over the forecast period, mainly because of increased natural gas exports to Mexico. We expect several pipelines in Mexico – Tula-Villa de Reyes, Tuxpan‒Tula, and Cuxtal Phase II connecting to the Energía Mayakan pipeline on the Yucatán Peninsula – to reach full service in 2024-25," said the US Energy Information Administration (EIA) in its April outlook report.

The pipelines started partial service in 2022-23 but are not fully operational yet.

Engie partnered with federal power utility CFE to begin works last week on the US$1.5bn capacity expansion of the Mayakan natural gas pipeline, also known as Cuxtal II. 

“In addition, flows via the Sur de Texas-Tuxpan underwater pipeline are likely to increase slightly in 2024, delivering natural gas from the United States to Mexico’s first LNG export project: Fast LNG Altamira,” said the EIA.

Along with fueling 48% of Mexico’s power generation, natural gas is widely used for heating and cooking and is an important fuel for many industrial processes in the country, but 70% of it is imported from the US, according to a report from the UN's Eclac.

In late March, CFE and Engie agreed to double Mayakan's transportation capacity from 250 to 567Mf3/d by building more than 700km of pipeline. 

Engie’s project would take gas from federal oil company Pemex’s Cactus processing plant in Chiapas state and run towards Valladolid in Yucatán state, some 150km from tourist hub Cancún. A further extension will connect the line with Cancún, CFE has said in a statement. 

More projects

There are two other projects not mentioned by the EIA report, perhaps due to their early stage of construction. 

The US$4.5bn Southeast Gateway offshore pipeline in the Gulf of Mexico is led by Canadian midstream firm TC Energy, while the 800km Sierra Madre pipeline is part of Mexico Pacific’s US$14bn Saguaro Energía LNG project, where construction is yet to start in Sonora state’s Puerto Libertad port.

The first is under construction, while the second is awaiting the green light to begin works. Together, they will add more than 1,500km of gas pipelines to the country’s network that will help transport a combined 4.1Bf3/d from the US to their final destinations, namely the Yucatán Peninsula and the northern Pacific coast.