Mexico is poised to play an more and more outstanding position within the world pure fuel market, pushed by inner demand and the LNG export tasks deliberate for the nation’s Pacific and Atlantic coasts.
Throughout a joint webinar on Thursday, consultants from NGI and the London Inventory Change Group plc (LSEG) described the market dynamics which can be boosting Mexico’s profile as a client and potential exporter of the gasoline.
Mexico already is the most important pure fuel market in Latin America and the eighth-largest on the earth, with demand at the moment averaging round 8.5 Bcf/d, mentioned NGI’s Christopher Lenton, senior editor for Mexico and Latin America.
“To place that into perspective the USA is the most important pure fuel market on the earth and Canada is the fifth, so actually North America is a pure fuel powerhouse,” Lenton mentioned.
Since state oil firm Petróleos Mexicanos (Pemex) consumes most of its fuel manufacturing, and since President Andrés Manuel López Obrador has principally eschewed international funding in exploration and manufacturing, Mexico depends on piped fuel from the USA to fulfill most of its inner wants.
Pemex “can’t do it by itself,” Lenton mentioned. “One other essential level is that regardless that we’ve seen rising pure fuel manufacturing out of Mexico this final 12 months, imports have really elevated and so it’s onerous to see the import pattern altering…”
The facility sector at the moment accounts for about 5 Bcf/d of Mexico’s fuel demand, with roughly 60% of the nation’s energy technology coming from gas-fired crops.
New combined-cycle crops may add one other 1 Bcf/d of demand by 2025 as state energy firm Comisión Federal de Electricidad (CFE) continues to increase its technology fleet in areas such because the Yucatán and Baja California peninsulas, Lenton mentioned.
In the meantime, greater than 6 Bcf/d of liquefied pure fuel tasks are in various phases of growth in Mexico, with builders planning to re-export feed fuel sourced through pipeline from the Permian Basin.
Of those tasks, Sempra’s Energía Costa Azul (ECA) Section 1 (0.4 Bcf/d) and New Fortress Power Inc.’s Altamira FLNG (0.2 Bcf/d) are the one ones beneath building.
ECA is on the West Coast, which might permit Permian fuel to bypass the Panama Canal and extra simply attain fast-growing demand within the Asia Pacific area.
Asia is predicted to account for 80% of world LNG demand progress from 2023-2030, mentioned LSEG’s Olumide Ajayi, who shared the digital stage with Lenton. China alone is predicted to account for 29% of the overall, he mentioned.
Different LNG tasks proposed for Mexico’s Pacific Coast embody the 1.8 Bcf/d Saguaro Energía and 0.5 Bcf/d Vista Pacifico.
NGI’s Jamison Cocklin, senior LNG editor, joined Lenton and Ajayi on the webinar. He famous there are almost 30 Bcf/d of liquefaction tasks both beneath building or working in North America. International provide issues triggered by Russia’s invasion of Ukraine offered a shot within the arm for LNG builders in 2022, in response to Cocklin.
Final 12 months “was a report 12 months for long-term U.S. LNG contracting,” he mentioned. “Consumers sought cowl from volatility on the spot market, and this was a market shift from earlier years…”
He added, “All of the time period contracts which were signed have helped tasks advance in North America and elsewhere.”
Consumers the world over signed up for about 77 million metric tons/12 months (mmty) of LNG final 12 months.
“That’s properly above the 51 million tons that they took in 2021,” Cocklin mentioned.
Henry Hub-indexed offers drove the contracting exercise, accounting for 70% of all of the contracts signed globally final 12 months. “And people are largely U.S. tasks,” Cocklin mentioned.
This 12 months, in the meantime, about 26 mmty of Henry Hub-linked offtake agreements have been signed as properly, “and there’s nonetheless numerous momentum available in the market and numerous contracting that’s happening,” he added.
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