Spotlight: Mexico’s expansion plans for the natgas network

Mexican energy regulator CRE has ratified the country’s five-year plan to develop the country’s Sistrangas natural gas pipeline network, which is reviewed every year by energy ministry Sener.

The plan includes the details of eight significant expansion projects throughout Mexico, with several slated to come online this year. However, no significant progress has been made by public utility CFE to award these projects.

In addition to the three biggest projects, outlined below, the plan includes the construction of two compression stations, increasing capacity at the Montegrande interconnection and making a series of modifications and upgrades to network infrastructure.

Salinas caverns

One of the most significant upgrades to the network is a project that would retrofit a series of salt caverns near the port city of Coatzacoalcos in Veracruz state to serve as a natural gas storage facility. The project would help offset potential supply interruptions in national oil company Pemex's southeastern gas processing facilities, which includes three units in the vicinity of Villahermosa and Reforma, close to the border between Chiapas and Tabasco states.

According to Sener, the project was conceived out of concern for the fact that 70-80% of Mexico’s total natural gas consumption is imported, which could easily jeopardize the country’s fuel access if suppliers (mainly the US via pipelines) face issues.

Under the plan, the project is expected to come online between 2022 and 2023, but CFE has not yet issued a public tender process for the construction contract. Sener has estimated project capex between US$318mn and US$481mn.

Jaltipán-Salina Cruz pipeline

While energy authorities and President Andrés Manuel López Obrador have said they are moving forward with this 247km-gas pipeline project connecting the port of Salina Cruz in Oaxaca state to Jáltipan in Veracruz state, the project is yet to be handed over to a contractor.

A key component of the president’s trans-isthmus corridor project (connecting the Gulf of Mexico to the Pacific Ocean across the Tehuantepec Isthmus with gas, rail and highway connections), the new line is intended to supply Pemex’s Salina Cruz refinery and feed what the government hopes will be a growing industrial base in southeastern Mexico.

However, two key projects originally tied to the pipeline, a new cogeneration plant planned by Pemex refining arm Transformación Industrial and a new natural gas liquefaction unit helmed by Enermex, are stuck in limbo.

Construction works on the initiative are expected to start this year, according to the BNamericas database.

'Prosperity' pipeline

The 355km Prosperidad pipeline will start at the town of Ixtepec in Oaxaca state and run to the Jáltipan-Salina duct, crossing Chiapas state and terminating at the town of Tapachula on the border with Guatemala, close to the port city of Puerto Chiapas.

According to Mexican pipeline network operator Cenagas, the project could be developed by a private sector player, although the specific mechanism has not yet been determined.

The duct could transport up to 145Mf3/d (million cubic feet per day), but a smaller version with a 94Mf3/d capacity is also being considered. The start of operations will depend on the construction of the Jáltipan-Salina Cruz pipeline.