Pemex fails to meet Mexico natgas demand – trade group president

15 March 2013 04:16  [Source: ICIS news]

MEXICO CITY (ICIS)--Mexican state energy producer Pemex is failing to meet the country's growing demand for natural gas, and the company needs to adopt a new model, the president of a trade group said on Thursday.

Natural gas is critical for both the petrochemical industry and for Mexico's manufacturers, which are large consumers of plastics, said Jose del Cueto Garcia, the president of the Asociacion Nacional de Industrias del Plastico (Anipac), Mexico's plastic trade group.

Del Cueto made his comments on the sidelines of the Plastimagen plastics conference.

Mexico has increasingly relied on imports, especially from the US, to meet its growing demand for the fuel, according to the US Energy Information Administration (EIA).

Mexico's natural gas consumption is at its highest ever, the EIA said. Moreover, it is increasing faster than production.

US natural gas exports to Mexico grew by 24% to 1.69bn cubic feet/day (bcf/day) in 2012, the highest since the US started tracking the data in 1973, the EIA said.

Mexico now relies on imports to supply more than 30% of its total supplies, the vast majority of which is from the US, the EIA said.

Although Mexico has substantial shale-gas reserves, it is limited in its ability to develop those reserves, an official with the country's Secretary of Energy said in 2012.

Mexican law limits energy production by foreign companies, as equity stakes and joint ventures are prohibited. Instead, Mexico can pay third-party companies through service-type contracts.

In regards to Mexico's shale gas, it is unclear what model the country would pursue, said Jorge Carrillo, manager of sales for Pemex Petroquimica, the Mexico state-owned producer of chemicals.

Pemex Petroquimica is part of Pemex, the state energy producer.

Pemex may attempt to develop shale gas alone, Carrillo said. It could also form some type of partnership with private companies. Mexico could also resolve the country's legal issues and allow private companies to produce natural gas.

Energy reform is among the goals of Mexico's new president, Enrique Pena Nieto.

Plastimagen ends on Friday.
By: Al Greenwood
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