Mexico Slows Natural Gas Imports from US Southwest in Favour of Texas Flows

SEATTLE (Oil Monster): Mexico has decelerated gas imports from the US Southwest in favor of sourcing more gas from Texas this October, pipeline nomination data shows.

While part of the shift is seasonal, expanded pipeline connectivity with Texas, including the Samalayuca-Sasabe and Wahalajara systems, has provided grid operators in Mexico with more choices and reduced importers’ exposure to the US Southwest’s more volatile, costly gas pricing.
Gas exports to Mexico from the US Southwest — excluding West Texas — have averaged 570 MMcf/d so far in October, down by about 200 MMcf/d from September. At the same time, exports from Texas increased 170 MMcf/d from last month to average 5.45 Bcf/d for Oct. 1-19.

Two regions in Mexico directly import gas from the US Southwest: Northwest Mexico, which comprises Sonora and Sinaloa states, and Baja California, which consists of Baja California and Baja California Sur.

Around half of the 200 MMcf/d drop can be accounted for by lower gas-fired power demand in Baja California, while the other 100 MMcf/d can be attributed to a sharp drop in flows to Northwest Mexico along Kinder Morgan’s Sierrita Pipeline.

Gas demand in Northwest Mexico has remained steady, averaging around 460 MMcf for the first half of October, up just 20 MMcf/d from the last two weeks of September, according to S&P Global Platts Analytics modeled data.

Sierrita Pipeline, which flows gas to the US-Mexico border near Sonora in Northwest Mexico, has no planned or unplanned maintenance projects on its electronic bulletin board. A spokesperson for Kinder Morgan declined to comment.

Modeled data from S&P Global Platts suggests that increased volumes from the North region of Mexico, which sources its gas from Texas, might have replaced those flows.

North Mexico-to-Northwest Mexico flows increased to average 380 MMcf/d for Oct. 1-15, up from 290 MMcf/d for the latter half of September.

Natural gas has become more available in the North of Mexico as newer pipelines including Fermaca’s 5 Bcf/d Waha system and TC´s South of Texas-Tuxpan 2.6 Bcf/d marine pipeline increase their operations.

Courtesy: www.hellenicshippingnews.com