LNG

Petroleos Mexicanos (Pemex), the Mexican oil and gas company, said its natural gas production rose by almost 2 percent last month compared with the previous month as the nation aims for a medium-term reduction of imports from the US by pipeline and as LNG shipments.

Pemex said its February output of gas averaged 3.763 billion cubic feet per day, an increase from the January average of 3.696 Bcf per day.

Associated gas extracted from oil wells accounted for 73.9 percent of the natural gas total, up from 72.1 percent a year ago.

However, Pemex’s natural gas production in February was down 42 percent from the peak level of 6.516 Bcf per day reached in 2009.

Since 2009, demand has been steadily rising among power companies and industrial customers, making Mexico increasingly dependent on the US imports.

Mexico imported 5.129 Bcf per day of natural gas from the US in 2018, more than four times the 1.258 Bcf per day averaged in 2009.

The nation also receives an average of three US LNG shipments per month and is the largest recipient of US liquefied volumes after South Korea.

Pemex said its crude oil output rose in February to 1.707 million barrels per day from 1.623 million barrels per day in January.

Pemex Chief Executive Octavio Romero Oropeza said that the company had been tasked by the government with reversing the negative trend in exploration and production of previous years and was focusing on rescuing the country’s “oil and gas sovereignty”.

The CEO said he was now working on accelerating the development of 20 new fields in Pemex’s portfolio.

Romero Oropeza explained that of the 20 fields to be developed, 16 were in shallow waters offshore and four were onshore.

He added that the 16 offshore fields would lead to the construction of 13 production platforms and the installation of 14 pipelines with a total length of 175 kilometres.

The CEO stated that the four new onshore fields would also require a high work load, such as the construction of three new drilling platforms and the expansion of nine existing platforms.

The new fields include the natural gas-rich Ixachi onshore field in the southeast state of Veracruz.

Pemex said it expected Ixachi to eventually supply about 700 million cubic feet per day of natural gas and 80,000 barrels per day of condensate.

The Ixachi field would begin supplying gas to the Sistrangas national pipeline grid by the end of 2019 and would help to partially offset declines at mature Pemex fields.

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.

Mexico is continuing to import growing volumes of pipeline natural gas and LNG as monthly shipments increased by more than 13 percent from the US cross-border pipelines and in the form of cargoes from the Sabine Pass liquefaction plant in the US state of Louisiana and other LNG exporting countries such as Nigeria and Peru.

Mexico said that was developing a set of privately-owned pipelines and other natural gas projects, including a floating LNG import facility, as part of a historic build-out of the nation’s gas infrastructure.

US liquefied natural gas exports gathered pace over the past week as domestic natural gas demand softened in the residential sector and pipeline exports to Mexico dropped 9 percent because of maintenance on infrastructure across the border.

March 27 (LNGJ)- Mexico is holding its latest upstream auction of exploration and production licences in areas of the Gulf of Mexico with high natural gas prospects. It is offering 35 blocks under production-sharing contracts in the southern waters of the Gulf. The Mexican authorities have authorized 21 companies to take part in the auction from 14 countries. The blocks are divided into three sectors: the Burgos Basin (blocks 1-14), the Tampico-Misantla and Veracruz Basins (blocks 15-27) and the southeastern basins (blocks 28-35). In addition to the US oil majors and European companies such as Royal Dutch Shell, there are also bidders from companies in Spain, Germany, Argentina, India and Malaysia.

Natural gas using nations and big pipeline and liquefied natural gas importers like the UK, Mexico and Japan were singled out by the International Energy Agency as countries that experienced drops in energy-related, carbon-dioxide emissions in 2017 as the global CO2 total rose.

Mexico, one of the leading Latin American energy producers and recipients of US pipeline natural gas and LNG has officially became the International Energy Agency's 30th member country.

BP of the UK, a leading global LNG market participant and North America’s largest natural gas supplier, is now delivering 200,000 million British thermal units per day to Mexico’s industrial users and local distribution companies in eight states.

LNG importer Mexico is now offering limited transparency in natural gas pricing showing that its domestic gas was at $4.10 per million British thermal units compared with $2.92 per MMBtu in the US and around $5.70 per MMBtu in Europe.