The cancellation of LNG cargoes from Gulf Coast export plants amid over-supply and a price collapse is set to be offset by an increase in pipeline exports to Mexico, the largest component of US natural gas trade and a key take-away portion of still high production levels.

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US pipeline natural gas supplies for Mexico have been approved by regulators to provide feed-gas for the US company Mexico Pacific Ltd to export LNG to Asia and other regions from a liquefaction plant proposed for the Mexican state of Sonora.

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Mexico is seeking more long-term natural gas supplies from the US Gulf Coast in competition to expected rising demand for feed-gas from large-scale LNG liquefaction and export projects under development, with the Mexicans issuing a request for offers for long-term supplies of natural gas at a West Texas hub.

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